by Ty Tagami | Capitol Beat News Service
ATLANTA — If Congress ultimately approves the legislation that the U.S. Senate adopted Monday to end the government shutdown, it could throttle the multibillion dollar hemp consumables industry.
A provision tucked into the nearly 400-page appropriations bill would close what critics consider a loophole in a 2018 federal law that legalized the sale and use of tetrahydrocannabinol, or THC, from the hemp plant.
THC is a psychoactive chemical present in both hemp and marijuana plants, and the law legalized a limited amount in consumable products when it is derived from hemp.
Chemists found ways around the limit, and highly intoxicating products quickly filled store shelves, including at gas stations and convenience stores. Children were getting their hands on the gummies, vape fluids and other substances, ratcheting up calls for a crackdown.
But THC from hemp also spurred a mainstream industry with known brands incorporating it into their products.
“The implications of the government shutdown are very significant,” said Christopher Lackner, the Colorado-based president of the Hemp Beverage Alliance. Food stamps, cancelled flights and other disruptions are the focus, he said. “What is being lost is that the fate of an entire $30 billion industry is also at stake.”
Among the potential casualties is Atlanta-based Scofflaw Brewing, a decade-old beermaker that introduced hemp beverages after alcohol consumption began to decline nationally a few years ago.
Co-founder Matt Shirah said he invested millions of dollars into making THC beverages under his own brand and for other companies.
Sales have exploded, already rivaling his beer revenue. Projections had his THC-infused beverages blossoming into a $100 million product line within a couple of years, he said.
If this legislation becomes law, it could threaten the livelihoods of a hundred employees and short circuit an expansion employing dozens more, he said.
“If they institute a ban, we would stay small, not hire anybody, start letting people go,” he said. “This is very bad.”
Critics of the industry argue that the 2018 Agriculture Improvement Act intended mainly to open a market for industrial uses of hemp rather than for intoxicating products.
“Intoxicating hemp-derived THC products have inundated communities throughout our states due to a grievously mistaken interpretation of the 2018 Farm Bill’s definition of ‘hemp’ that companies are leveraging to pursue profits at the expense of public safety and health,” said a letter to Congress last month that was signed by 39 state attorneys general, including Georgia’s Chris Carr.
The letter accused shady players in the new industry of marketing products such as psychoactive gummies to minors, and it cited an increase in pediatric exposures to THC after the law’s passage.
The 2018 law attempted to limit the intoxicating potential by capping hemp-based THC in products at 0.3% or less “on a dry weight basis,” which some have described as ambiguous.
Marijuana remains a Schedule 1 drug under federal law, making it illegal for consumer use. So chemists got to work and learned how to concentrate the intoxicating effects of hemp using different elements of the plant.
They extracted an Alphabet soup of alternative forms of THC, such as delta-8, delta-10, THC-O, THCP and HHC, then infused them at high concentrations into a multitude of highly intoxicating “Frankenstein” products, the attorneys general letter said.
Gregg Raduka, a founding member of Georgians for Responsible Marijuana Policy, heralded the Senate’s proposed cap as “wonderful news,” adding that he hoped the U.S. House of Representatives would approve it. He had testified at state legislative hearings about what he saw as a burgeoning and dangerous hemp consumables market in Georgia.
Shirah’s beverages contain THC at levels condoned under state laws that were established to regulate the industry after the 2018 federal law made it legal.
Scofflaw sells cans of lemonade and other beverages with five or 10 milligrams of THC. The legislation that passed the U.S. Senate would limit products like that to 0.4 milligrams per container. It would also apply to gummies and any other consumable with hemp-derived THC, whether in bags, bottles, cans, cartridges, packets or other enclosures.
The Georgia Department of Agriculture has tried to weed out bad actors who exceed the state’s legal limits while supporting compliant businesses. Agriculture Commissioner Tyler Harper even spoke at the Hemp Beverage Alliance’s convention in Atlanta in July, noted Lackner, the Alliance president.
Lackner likened the crackdown to a ban that takes out sugar and all other sweeteners when the target was just saccharine.
“I don’t know what the intention is,” he said. “All I know is that the end the result is going to be catastrophic for our industry.”
Lackner saw a silver lining in the legislation though. It includes language that would allow the industry to keep operating for another year, giving mainstream companies time to lobby for a law that would let them continue to exist while eliminating competitors with highly intoxicating products.
