Two U.S. House lawmakers have introduced bipartisan legislation that would create a federal regulatory system for hemp-derived beverages and allow those products to remain on the market ahead of a Nov. 12 federal ban on intoxicating hemp products.
Reps. Beth Van Duyne, R-Texas, and Greg Landsman, D-Ohio, introduced the Beverage Regulatory Parity Act on Aug. 10. The 27-page bill would place hemp-derived beverages under the Alcohol and Tobacco Tax and Trade Bureau, or TTB, with the agency directed to establish a three-tiered distribution system for manufacturers, wholesalers and retailers after consulting with the U.S. Food and Drug Administration.
The proposal is aimed at hemp-derived beverages only and does not address other products. It is the latest effort to avert the federal government’s forthcoming ban on intoxicating hemp products scheduled to take effect Nov. 12.
Under current law, hemp-derived products containing more than 0.3% total THC, more than 0.4 milligrams of total THC per container, or any amount of a synthetic or unnatural cannabinoid will be prohibited on Nov. 12.
By contrast, the Beverage Regulatory Parity Act would allow a hemp-derived beverage to contain up to 5 milligrams of total THC per serving. A serving is defined in the bill as a single-use 12-ounce container or a multi-serving container with a total volume of 750 milliliters.
Van Duyne said the legislation is intended to bring order to a market now facing uncertainty.
"I’ve heard directly from people across North Texas who consume hemp-derived beverages, and businesses who sell them, that they need clarity, not a ban that pushes this market underground", Van Duyne said. "The Beverage Regulatory Parity Act brings long-overdue certainty to the industry by regulating these beverages with the same proven structure that has successfully governed alcohol for decades. I am glad to introduce this bipartisan legislation alongside Rep. Greg Landsman, because American families and responsible businesses deserve structure and sensible regulations that protect children while allowing adults to choose beverages they prefer."
Landsman said businesses in his district have already committed heavily to the category.
"There are people all over Southwest Ohio who have invested significantly in these products, and they’ve done so safely", Landsman said. "Now the federal government is telling them they can’t sell these products anymore. Our bill is bipartisan and very straightforward. It will keep people safe and let these folks stay in business."
How the bill would regulate hemp beverages
The bill would apply standards for labeling, advertising and trade practices modeled on rules that have governed the alcohol industry since the end of Prohibition. It would also set a nationwide 21-and-older standard to possess, consume or purchase hemp-derived beverages.
In addition, the beverages would face mandatory testing, TTB permits, THC limits and risk warnings. The legislation also would impose a tax rate of 8 cents per milligram on intoxicating THC content within a hemp-derived beverage.
Nothing in the bill would stop states from adopting stricter standards or from banning hemp-derived beverages entirely.
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Product definition in the legislation
The proposal defines a hemp-derived beverage as a non-alcoholic liquid intended for human consumption that contains one or more naturally-occurring cannabinoids and is a final product intended for sale to a consumer. It must be packaged and labeled within the United States and cannot contain naturally-occurring cannabinoids extracted, sourced or processed from hemp plants cultivated outside of the United States.
The bill also says the product cannot contain synthetically-derived cannabinoids or other intoxicating molecules or compounds, or molecules or compounds that are structurally identical or intended to mimic the effects of an intoxicating molecule or compound. It cannot be a tincture, isolate, powder or distillate. It cannot contain more than 5 milligrams of total intoxicating tetrahydrocannabinol content per serving, cannot be intended to be consumed, labeled or advertised as a dietary supplement, cannot contain more than 5 milligrams of non-tetrahydrocannabinol naturally occurring cannabinoids, and cannot contain a drug that is the subject of an application for FDA approval.
According to the bill’s sponsors, the measure would ban products from containing synthetically derived cannabinoids to "ensure only natural plant-based compounds end up in these beverages, eliminating any unpredictable lab-made substances."
Industry backing
Supporters listed for the Beverage Regulatory Parity Act include Beverage Alcohol Merchants Coalition (BAMCO), Wine and Spirits Wholesalers of America (WSWA), Texas Package Stores Association (TPSA), Specs Wine, Spirits & Fine Foods, Coalition of Adult Beverage Alternatives (CABA), Hemp Beverage Alliance (HBA), American Alternative Care Policy Network (AACPN), Total Wine & More, American Beverage Licensees (ABL), Beverage Wholesalers for Responsible Regulation (BWRR), and Texas Food & Fuel Association.
"The Hemp Beverage Alliance strongly supports the Beverage Regulatory Parity Act", Hemp Beverage Alliance founder and President Christopher Lackner said. "The alcohol regulatory system is a proven success that consumers trust. The three-tier system will protect public health, require strong product testing and quality control, ensure products are kept away from children and allow responsible adults to enjoy hemp beverages as they would any other adult beverage."
