The government shutdown may be over, but the funding bill that got things back up and running may be threatening a multi-billion dollar industry.
The bill contained a provision that effectively bans all hemp-derived consumer products.
Hemp is a derivative of the cannabis plant, and has industrial uses in things like rope, textiles and seed. It was legalized in the 2018 Farm Bill, which contained a broad definition that created a “loophole” in federal rules on THC, the compound extracted from the plant that creates a high.
As several states made moves to legalize marijuana, many companies used that loophole to create products with psychoactive cannabinoids from legal hemp – such as gummies, drinks and vapes. And the products took off.
Aaron Juhnke owns Junkyard Brewing Company, a craft beer brewery in Moorhead, Minnesota. He says his business initially began offering THC gummies, and when customers responded positively they dove in and began making their own THC infused beverages. He says the products provided an alternative after consumers drank less beer after the pandemic – so some breweries went all in.
"You've got a lot of breweries in Minnesota that have THC beverages as a substantial portion of their total business, and a lot of them are freaked out that this could put them under. We're a much smaller brewery that's more tap room based, so I'm not as freaked out as some of the bigger production breweries. However, I do think it will really, really hurt us to lose that revenue."
The ban does not take effect for a year, so businesses have time to make moves. Juhnke says this may mean the industry gears up to fight for a change – either to repeal the ban, or replace it with a new law. And he says that does create an opportunity to make things better.
"I think the only thing that potentially could see some success at the federal level is, like, legislation that replaces it that would allow the hemp derived THC industry to continue in some form while addressing those public safety concerns - because there are real safety concerns. In states that, for whatever reason, have chosen to not regulate their Farm Bill compliant THC hemp market - it's just a complete wild west."
Juhnke says he thinks Minnesota’s implementation of the industry has been cohesive, allowing alcohol and THC to effectively co-exist without having to compete against each other. He says the coming year should be interesting – industry leaders claim hemp derived THC has created more than 300,000 jobs, and a $28 billion market.