If you’ve been to a brewery lately or scanned the grocery store cooler shelves, you've probably noticed more cannabis-infused drinks. The THC beverages have become a popular alternative to beer, with sales topping $1.1 billion last year, according to Whitney Economics. But the party could come to an end later this year under a new federal law that bans the drinks along with other hemp-derived THC products. Daniel Larlham Jr. wrote about it for The Charlotte Ledger Business Newsletter and he joined WFAE’s Marshall Terry for more.
Marshall Terry: I've noticed these cannabis beverages seem to be everywhere. Why have they become so popular and are they exactly legal?
Daniel Larlham Jr.: Before 2018, there were some sales under the recreational dispensary umbrella in states that have those. But really, it was the 2018 Farm Bill that popularized them.
That bill allowed farmers to grow hemp and hemp products to be sold. Part of why they've become so popular as well is that consumer preference for alcohol is declining. A lot of these manufacturers have found that people are looking for alternatives, THC beverages being one of them. As for the legality, they're legal under the Farm Bill. However, the FDA has not approved THC and CBD additives to food and beverages. So there's a little bit of a legal discussion about that.
Terry: This law I mentioned, what is it and what would it do exactly?
Larlham Jr.: The funding extension bill that you might remember from last November changed the definitions of hemp in the Farm Bill and, particularly, the allowable limits of total THC in any given product. What people say it's going to do is really wipe out an overwhelming majority of the hemp products on the market today.
Terry: You spoke to some breweries in Charlotte with THC products on their menus. What did they say?
Larlham Jr.: As I said before, as consumer preferences change and alcohol becomes less popular, breweries have found that people are looking for alternatives. Like non-alcoholic beers, which have also become popular in breweries in recent years, these THC beverages give them an option that still has that light social buzz.
One brewer told me the intent is for them to be sessionable, you can have one or two in one sitting and not be overly inebriated or anything like that. I also spoke to the president of NoDa Brewing, Jacob Virgil. He said that their seltzer brand Happy Bird had accounted for about 11% of the brewery's sales since launching over a year ago.
Terry: This ban doesn’t take effect until November. What, if anything, can the makers of these THC beverages do?
Larlham Jr.: What I have heard is that, kind of in anticipation of the ban, retailers and distributors are going to begin winding down their inventory in the next couple of months. Nobody wants to be holding the bag on this, stuck with a lot of inventory that's now banned. I do know there's hope among the industry for an extension to the ban or some sort of legislative change at the federal and state levels.
In some states, South Carolina, for example, is working towards a legislative carveout for the beverages. While it would allow the beverages to stick around, it does change how they're sold and the allowable THC content. I do know one thing in particular about the bill is that they wouldn't be allowed to be sold for on-premise consumption and most of the sales would be restricted to liquor stores.
