Indeed Brewing’s production line moved quickly, filling cans with THC-infused seltzer instead of beer. The product, which features a compound that gets cannabis users high, has been the lifeblood of Indeed and other craft breweries as it has been in recent years.
However, that boom appears to be coming to a rapid end. The bill that ended the federal government shutdown this month included a provision that would ban these beverages, along with other harmful drinks and snacks made with hemp products that have proliferated across the country in recent years. Now, the $24 billion cannabis industry is scrambling to save itself before the provision goes into effect in November 2026.
“This is a big deal,” said Ryan Bundy, Indeed’s chief business officer. “It’s going to be disruptive for our breweries, it’s going to be disruptive for our industry, and it’s going to be disruptive for a lot of people who obviously like these things.”
Here’s what you need to know about the impending ban making cannabis-derived products defective.
Congress opened its doors in 2018
Marijuana and hemp are the same species. Marijuana is grown so that its flowers contain high levels of THC. Low THC hemp is grown for its durable fiber, food and health products. “Rope, not drugs” has long been the motto of farmers who support hemp legalization.
Cannabis advocates saw potential at the federal level after states began legalizing marijuana for adult use more than a decade ago. As part of the 2018 Farm Bill, Congress legalized the cultivation of industrial hemp to provide a new cash crop for farmers, including in Republican Sen. Mitch McConnell’s home state of Kentucky.
But the way the law defined hemp (as less than 0.3% THC in a particular type called delta-9) created a major loophole. Even if a bag of drinks or snacks meets that threshold, it could still contain more than enough THC to get people high. Companies could further exploit this law by extracting a nonimpairing compound called CBD and chemically changing it into other types of impaired THC, such as delta-8 and delta-10.
result? Vape oils, gummy candies, potato chips, cookies, soda, and other unregulated and untested products high in cannabis-derived THC have spread across the country. In many places, even teenagers can now purchase them at gas stations and convenience stores. States where marijuana is legal reduce the cost of a heavily taxed and regulated product. In some cases, bans on recreational use of weed have been circumvented.
Some states, including Indiana, report THC exposure in children to poison control centers.
A patchwork of state regulations
Since then, dozens of states have taken steps to regulate or ban damaging hemp products. In October, Governor Gavin Newsom signed a bill banning the sale of intoxicating cannabis products outside of California’s legal marijuana system.
The state of Texas, which has a huge hemp market, is moving toward regulating the sale of degrading hemp, including restricting sales to people over 21 years old. In Nebraska, lawmakers are instead considering a bill that would criminalize the sale and possession of products containing hemp-derived THC.
Washington State has adopted a program to regulate cannabis cultivation. But the number of licensed growers has plummeted since the state banned intoxicating hemp products outside of regulated cannabis markets in 2023. Five years ago, there were 220 companies, said Trecia Ehrlich, cannabis program manager for the state Department of Agriculture. This year, there were 42, but she expects that number to drop by about half next year because of the impending federal ban.
Minnesota legalized infused drinks and edibles for people 21 and older in 2022. The product, which must be made from legally certified hemp, is so popular that Target now offers the THC drink in some stores across the state.
It’s also been a boon for liquor stores, where THC drinks account for nearly a quarter of their sales, and small Minneapolis beer companies like Indeed, Bundy said. A few blocks away at Bauhaus Brewery, THC beverages account for 26% of distributed product revenue and 11% of brewery taproom revenue.
Powerful senators move to close loophole
None of this was what McConnell intended when he helped write the 2018 Farm Bill. He ultimately closed the loophole by including a federal ban on hemp THC in the measure approved by the Senate on Nov. 10 to end the 43-day federal government shutdown.
“We can keep these dangerous products out of the hands of children and at the same time protect the hemp industry for farmers,” McConnell said. “Industrial hemp and CBD remain legal for industrial use.”
Some in the legal cannabis industry welcomed the ban, saying it would end unfair competition.
They were joined by prohibitionists. “There is no legitimate argument for allowing these dangerous products to be sold in our country,” said Kevin Sabet, president and CEO of Smart Approaches to Marijuana.
However, the ban will not be in effect for a year. This gives the industry hope that there is still time to pass regulations that improve the hemp THC industry, such as banning synthetically derived THC, mandating age restrictions for sales, and banning marketing to children, rather than eradicating hemp THC.
“We’re very hopeful that this cool idea will prevail,” said Jonathan Miller, general counsel for the US Hemp Roundtable, an industry group. “If they really thought there was a health emergency, the one-year period wouldn’t exist.”
The group says the federal ban would threaten more than 300,000 jobs and harm the state.
Drew Hurst, president and chief operating officer of the Bauhaus Brewing Institute, has no doubt that his company will be among the victims.
“If things go as written at this point, I don’t see any way Bauhaus can continue to operate,” Hirst said.
What happens next?
Many lawmakers have said they would push for regulation of the hemp THC industry. Kentucky’s No. 2 senator, Republican Rand Paul, introduced an amendment to remove McConnell’s marijuana language from a key government funding bill, but it failed on a lopsided 76-24 vote.
Minnesota Democratic Sens. Amy Klobuchar and Tina Smith are among those developing strategies to save the industry. Klobuchar pointed out at a recent press conference that the ban was inserted into an unrelated shutdown bill without a public hearing. She suggested the federal government could allow each state to develop its own regulatory framework or use Minnesota’s strict regulations as a model for the nation.
Kevin Hilliard, co-founder of Insight Brewing in Minneapolis, said the cannabis industry needs a solution by next spring’s planting season.
“If farmers are worried, they won’t plant,” Hilliard said.
Karnowski and Johnson contributed to The Associated Press. Johnson reported from Seattle. AP Congressional Writer Kevin Freaking contributed from Washington, DC.
