Intoxicating Hemp Regulations Take Shape in Several States
Jessica Infante
June 3, 2025
Legislation in progress across several states aims to bring beverages infused with intoxicating hemp into regulatory frameworks akin to alcohol’s three-tier system.
“What we expected is what’s happening,” Climbing Kites co-founder and general counsel Scott Selix told Brewbound. “A lot of the regulation is starting to treat this like alcohol.”
Last week, Tennessee Gov. Bill Lee signed House Bill 1376 into law, which moves hemp-derived products under the Alcoholic Beverage Commission’s (ABC) purview from that of the Tennessee Department of Agriculture, among other changes, drawing mixed reactions from people in the industry. The law becomes effective January 1, 2026.
Several of the law’s provisions will streamline regulations for hemp-infused beverages in servings of 12 oz. or greater. Licensed retailers will be permitted “to maintain hemp-derived cannabinoid beverages in areas that are not behind a barrier,” according to the law.
“For beverages that are at least 12 oz., they can be merchandised and displayed just like beer, so you don’t have to be 21 to enter the store. You do have to be 21 to purchase it,” Selix said. “For everything else, it either has to be in a store that is 21-plus, or it has to be behind a barrier. So anything smokeable, gummies, beverages smaller than 12 oz., it either needs to be a 21-plus store or behind a barrier.”
For Climbing Kites, which produces CBD- and THC-infused sparkling water, the 12 oz. beverage carveout made the law a welcome change.
“For the most part, the beverage industry was OK with this, either agnostic or we were somewhat in favor, because it gets beverages out from behind the counter, which we really liked,” Selix said.
A “somewhat big change” in the law is the reduction of allowed hemp-derived cannabinoids from 25 mg per serving to 15 mg, Selix noted. However, any milligrams of CBD do not count toward the 15 mg cap.
Kegged infused beverages are capped at 650 mg per 15.5-gallon keg and 325 mg per 7.75-gallon keg, according to the law.
HB 1376 banned direct-to-consumer (DTC) sales and removed THCa, the non-intoxicating acid that converts to intoxicating delta-9 THC, from the list of approved cannabinoids.
Not all hemp-adjacent groups are on board with the changes. The Tennessee Growers Coalition is “planning a lawsuit,” the organization posted on Facebook hours after Lee signed the bill into law. Prior to his signature, the U.S. Hemp Roundtable urged supporters to ask Lee to veto the bill, arguing that the loss of DTC sales “destroyed an important line of commerce” for consumers and hemp farmers and that moving hemp under the state’s ABC “provides a monopoly to the alcohol industry.”
Tennessee is mostly “a great market” for Iowa-headquartered Climbing Kites, Selix said. In addition to Tennessee and Iowa, the brand is sold in 14 other states (Alabama, Arizona, Florida, Georgia, Illinois, Kansas, Minnesota, Missouri, Nebraska, North Carolina, Pennsylvania, South Carolina, South Dakota and Wisconsin), according to its website.
“It’s been up and down because of all of the changes and because of the uncertainty,” Selix said. “There’s been a lot of retailers that were hesitant to jump in. A lot of them just said we don’t have space to put in a locked box, and we don’t have space.
“It is a great market for us, but we’re really hopeful that this will help,” he continued. “It’ll make it a little more convenient for consumers to find beverages in general, and so we’re excited about that.”
Hemp beverage producers find themselves in a conventionally unlikely position: asking lawmakers to regulate their industry, Selix said.
“Everyone is realizing that it would be very difficult to put this genie back in the bottle,” he said. “Our hope is that we get good regulation, because, as an industry, we need more regulation. We have some. The regulation that’s there is working, and we are seeing safe products proliferate, but we still would like more.
“It’s very rare that an industry comes as a whole to their regulatory agencies and says, ‘Give us more regulation, give us more taxation. Let’s keep the public safe,’ but that’s what our industry has been doing, and we’re hopeful that that will be the outcome,” he said.
While some states are setting up regulatory frameworks for the burgeoning intoxicating hemp industry, all eyes are on Texas Gov. Greg Abbott, who could veto or sign into law a bill that would ban all THC and THCA products in the state, where intoxicating hemp has grown into a multi-billion-dollar industry that employs more than 50,000 people.
Lt. Gov. Dan Patrick, who personally championed Senate Bill 3 to ban the products, hosted a fiery press conference on Wednesday due to what he called “a tremendous onslaught of pressure from an $8 billion industry that has unlimited money, and they’re trying to poison the story, to stop this from happening.” During the conference, Patrick vilified Texas’ intoxicating hemp industry and said he was taking action “to save an entire generation of being hooked on drugs.”
Patrick refused to speculate on whether Abbott would veto the bill and told assembled reporters he was “not worried about the governor understanding it – I’m worried about you all understanding it,” KXAN reported.
Below are highlights of legislative movement in other states …
Alabama Gov. Kay Ivey signed a bill into law earlier this month with some elements similar to Tennessee’s legislation. It brought hemp under the regulation of the Alcoholic Beverage Control Board and defined a licensing structure for manufacturers, distributors and retailers.
Alabama outlawed smokeable hemp products and e-commerce sales, and capped edibles and beverages to 10 mg of THC per serving.
In Delaware, House Bill 98 moved out of the Economic Development, Banking, Insurance and Commerce Committee earlier this month. It would establish an infused beverage endorsement to grant privileges to businesses to manufacture, prepare, package and deliver infused beverages to licensed package stores for off-premise consumption.
Under HB 98, infused beverages would be located in a separate section of stores away from alcohol and clearly labeled as containing THC. Sales would be banned on Sundays, Easter, Thanksgiving and Christmas. Infused beverages’ THC content could not exceed 10 mg per 12 oz. serving.
Entities eligible to apply for infused beverage endorsements include manufacturers, suppliers and importers with licenses from the Alcoholic Beverage Control Commission (ABCC), and marijuana facilities or microbusinesses. Endorsements would be valid for two years and renewable.
In Massachusetts, a pair of bills (House Bill 357 and Senate Bill 222) would establish an infused beverage endorsement for producers, wholesalers and retailers that handle intoxicating cannabinoids, which the bills define to include delta-6 THC, delta-8 THC, delta-9 THC, delta-10 THC and delta-9 THC acid A.
Endorsements would be valid for renewable one-year terms, and would only be issued to applicants who hold “unencumbered license[s]” to sell alcoholic beverages (including beer-and-wine licenses) or operate medical and/or recreational adult-use marijana retail shops.
HB 357 and SB 222 propose a $2.20/gallon excise tax on infused beverages sold within Massachusetts, and would exempt the products from sales tax.
Massachusetts House Bill 168 would require the commonwealth’s Cannabis Control Commission to regulate products with hemp-derived THC.
In Maine, Legislative Document 1983 (LD 1983) would require hemp products, which wouldn’t fall under the state’s cannabis framework by definition, to be transferred to adult use cannabis manufacturing facilities and regulated through the state’s cannabis framework.
The Beer Institute (BI), which counts the country’s largest brewers among its members, has submitted similar letters to legislators in Delaware and Massachusetts about proposed THC-related bills. The BI has asked lawmakers to consider four principles when weighing any laws about produced made legal through the 2018 Farm Bill:
Revenue – the BI calls for excise tax rates on intoxicating hemp products to be “higher than the highest rate for any beverage-alcohol product.”
Regulation – the trade group “support[s] a robust regulatory framework implemented by the appropriate federal and state government agencies” and asks that all involved agencies are “fully resourced and appropriately staffed.”
Responsibility – the BI asks for 21+ age restriction, packaging and advertising that does not appeal to minors, and a “zero tolerance approach” for THC-impaired driving “until proper field measurement technology and protocol are widely available and guidance on safe levels of consumption is established.”
Research – the BI “support[s] immediate and sustained medical and safety research” on hemp products, and asks the industry “to cease making health claims that are not substantiated by science or data.”
“We are proud of our longstanding commitment and investment to empower adult consumers to make responsible decisions about the consumption of our products and urge you to utilize the beer industry as a resource as you seek to address the proliferation of intoxicating hemp beverages,” BI president and CEO Brian Crawford wrote.