Alcohol industry representatives descended on Washington, D.C. earlier this month to urge members of Congress to create a federal regulatory framework for intoxicating hemp-derived products such as cannabinoid-infused beverages—a market segment that’s ballooned since the legalization of hemp through the 2018 Farm Bill.
Members of the Wine & Spirits Wholesalers of America (WSWA) met with lawmakers and staffers to advocate for three key policy priorities that the group says is based on “sound principles of alcohol distribution.” They include banning synthetic THC, setting up a federal system for testing and labeling products and establishing state-level power to regulate retail sales.
“WSWA members are committed to responsible industry growth and consumer safety,” Ryan Mosses, CEO of alcohol wholesaler Best Brands and a member of WSWA’s board of directors, said in a statement about the action. “Legislative fly-ins like this are invaluable opportunities for our members to engage directly with lawmakers, share industry insights, and advocate for smart, science-backed regulations that benefit both businesses and consumers.”
Michael Bilello, the group’s executive vice president of communications and marketing, said on social media that the message to lawmakers was clear: “Federal regulation of hemp-derived beverages is essential. Cannabis should be regulated—and enjoyed—responsibly by adult consumers.”
WSWA is urging lawmakers to clarify rules around hemp-derived cannabinoid products in the next federal Farm Bill. The group said in a press release that it “believes the next Farm Bill should explicitly allow for the production of only naturally derived THC products from hemp (specifically Delta-9) while explicitly granting individual states primary authority to regulate distribution and retail sales, including state level prohibition, to consumers over the age of 21 within their own borders.”
WSWA similarly called on Congress last yar to create a regulatory framework for hemp-based intoxicating cannabinoids rather than impose an outright ban, as was then being proposed.
“We strongly advocate for clear federal rules and regulations that define intoxicating hemp compounds and to grant states the authority to regulate these products within their borders,” the trade association said at the time.
The alcohol industry in recent years has been increasingly involved in lobbying on marijuana issues. That’s in part due to expanding marijuana markets that are competing with alcohol sales.
This month’s lobbying effort, for instance, came alongside a separate policy memo from another alcohol trade group, the American Beverage Licensees (ABL), which argued that only by businesses licensed to sell alcohol should be able to carry intoxicating hemp products.
“States should restrict the sale of intoxicating THC products to businesses licensed to sell beverage alcohol and that are regularly inspected for compliance with laws aimed at preventing sales to individuals under 21,” the memo says.
The group contends that alcohol retailers, “with many decades of proven compliance, are best positioned to sell these products.”
Regulators should also treat cannabis similar to alcohol, the two-page policy memo says, such as by establishing licensing requirements, clear labeling standards and restrictions on advertising. “It may also include limits on potency per serving,” the alcohol trade group asserted.
A report from Bloomberg Intelligence (BI) last year called cannabis a “significant threat” to the alcohol industry, citing survey data that suggests more people are using cannabis as a substitute for alcoholic beverages such a beer and wine.
The report projected that slumping sales of wine and spirits “may extend indefinitely,” which will “stem largely” from the increased consumer access to “legal cannabis” and other alternative products.
“The use of cannabis among consumers is on the rise, and we believe it’s being substituted for alcoholic beverages,” BI analysts wrote. “We also anticipate that increasing US consumer access to recreational marijuana will be a significant threat to all alcoholic drinks, particularly beer and wine, given their lower price points relative to liquor.”
Last November, meanwhile, a beer industry trade group put out a statement of guiding principles to address what it called “the proliferation of largely unregulated intoxicating hemp and cannabis products,” warning of risks to consumers and communities resulting from THC consumption.
The Beer Institute advised in the document that lawmakers impose a federal excise tax on both hemp and cannabis products, “with the tax rate set higher than the highest rate for any beverage alcohol product.”
It also urged a “zero tolerance approach” to THC and driving—a policy that could prevent casual cannabis consumers from ever being able to legally drive due to how long the drug’s metabolites stay in the body after use—and recommended keeping in place the federal ban on combining intoxicating cannabinoids and alcohol.
“For decades, America’s brewers and beer importers have demonstrated their commitment to fostering a culture of moderation and the responsible consumption of our products, all within a robust regulatory and and taxation system,” president and CEO Brian Crawford said in a statement at the time. “The current patchwork of intoxicating hemp and cannabis laws and regulations do not meet the same standards to which the beer industry willingly adheres.”
Growing evidence suggests that frequent marijuana use is now more common among Americans than regular alcohol use. A recent study found that more Americans consume cannabis every day than drink alcohol on a daily basis. Since 1992 the per capita rate of daily cannabis consumption in the country has increased nearly 15 times over.
A multinational investment bank said in a 2023 report that marijuana has also become a “formidable competitor” to alcohol, projecting that nearly 20 million more people will regularly consume cannabis over the next five years as booze loses a couple million drinkers. Marijuana sales are estimated to reach $37 billion in 2027 in the U.S., it said, as more state markets come online.
A separate study out of Canada, where marijuana is federally legal, found that legalization was “associated with a decline in beer sales,” suggesting a substitution effect.
Data from a Gallup survey published in August of last year also found that Americans consider marijuana to be less harmful than alcohol, cigarettes, vapes and other tobacco products.
As for hemp-derived cannabinoids, a hemp industry expert told congressional lawmakers earlier this week that the market is “begging” for federal regulations around cannabis products.
At the hearing, Rep. James Comer (R-KY) also inquired about the U.S. Food and Drug Administration’s (FDA) inaction around regulations, sarcastically asking if it’d require “a gazillion bureaucrats that work from home” to regulate cannabinoids such as CBD.
In the absence of FDA rules, states from California to Florida have pushed for sweeping changes to their own laws around consumable hemp products. While much of the focus has been on intoxicating products, federally legal CBD businesses have also found themselves increasingly in the crosshairs.
Meanwhile, as lawmakers prepare to once again take up large-scale agriculture legislation this session, congressional researchers in January provided an overview of the policy landscape around hemp—emphasizing the divides around various cannabis-related proposals among legislators, stakeholders and advocates.
Senate Democrats released the long-awaited draft of 2024 Farm Bill last year that contained several proposed changes to federal hemp laws—including provisions to amend how the legal limit of THC is measured and reducing regulatory barriers for farmers who grow the crop for grain or fiber. But certain stakeholders had expressed concern that part of the intent of the legislation was to “eliminate a whole range of products” that are now sold in the market.
For the time being, the hemp industry continues to face unique regulatory hurdles that stakeholders blame for the crop’s value plummeting in the short years since its legalization. Despite the economic conditions, however, a recent report found that the hemp market in 2022 was larger than all state marijuana markets, and it roughly equaled sales for craft beer nationally.
Alcohol industry representatives descended on Washington, D.C. earlier this month to urge members of Congress to create a federal regulatory framework for intoxicating hemp-derived products such as cannabinoid-infused beverages—a market segment that’s ballooned since the legalization of hemp through the 2018 Farm Bill. Members of the Wine & Spirits Wholesalers of America (WSWA) met with Read More
