At midnight this morning in Illinois, hemp-derived THC drinks transformed from grocery store commodities into illegal narcotics, and manufacturers have been rushing to sell their inventory or ship it out of state.
Republicans tacked a last-minute provision on to last year’s spending bill that ended the government shutdown, banning all hemp-derived THC products, including the THC-infused alcohol alternatives sold at liquor stores and grocery stores. Under the new law, no container can have more than ۰.۴mg THC total.
In June, Illinois passed a state-level law intended to align with the federal ban, initially set to go into effect this month. While Congress delayed the federal ban until December, Illinois did not change its state-level effective date.
There has been some confusion around the Illinois ban because of a lawsuit filed last week by the Illinois Healthy Alternatives Association, a hemp lobbying trade group that includes approximately ۲۵۰ Illinois businesses. Some headlines suggested the lawsuit effectively paused the Illinois hemp ban until ۱۹ November, but that pause only applies to businesses that sued.
The timing of the ban is unfortunate for Playdate, a non-alcoholic wine company that launched its first product, a THC-infused, NA rosé, less than two months ago. With less than two weeks to go before the ban, Playdate cofounders Sammy Dorf and Brian Ward were still unsure how to handle their remaining inventory. It’s possible the federal government will ultimately leave hemp-derived THC regulation to the states, mirroring their approach to medical and recreational cannabis.
Many hemp companies are strategically shipping their remaining inventory to Minnesota and Tennessee, which already have their own hemp regulations. After selling off Playdate wine at a steep discount, Dorf and Ward said they have less than a truckload left, which they’ll ship to states where they can still sell it. If the hemp ban remains in place, Ward and Dorf intend to shift their focus to plain NA wine, minus the THC.
Joe Chura, CEO and founder of Go Brewing in Naperville, Illinois, got into the business the other way around. Chura’s initial goal was to create the world’s first gluten-free, NA beer. He launched Easy Man, a THC-infused option, just last year, hoping to provide an alternative buzz without the health consequences of heavy drinking.
“Probably a month ago, we made our last batch,” Chura said. “We were planning another one that we ended up cancelling, because we didn’t want to get stuck with it.”
The last of the Easy Man left sold out on Friday, Chura added: “Had I known the demand would have been as great at the end, I probably would have made [the cancelled batch.] But it was cutting it close.”
Perfectly Dosed, a Chicago-based company that sells THC emulsions to beverage companies, didn’t have the option to dispense their remaining inventory in a fire sale, as they sell it to other companies in bulk. They had a metric ton of emulsion leftover, containing more than ۱۰۰m milligrams of THC, according to cofounder and CEO Alexander Choi.
“We’re hopeful that more reasonable regulations will pass, and so we’d like our stuff closer to home than further,” Choi said. They shipped their metric ton of emulsion to Wisconsin.
Companies outside Illinois have another month to off-load their product. Joe Gerrity, CEO of Crescent Canna, has been selling beverages off to individual consumers by the pallet. He has some sense of who’s buying. “When someone’s buying thousands of dollars worth of product, you want to do some due diligence,” Gerrity said, adding that several former NBA players bought pallets.
One of the most difficult things about planning for the ban is the uncertainty around how it’s going to be implemented and enforced.
“It was hard for us to tell when distributors were going to stop selling our products, when retailers were going to ask them to be off the shelves,” Gerrity said.
While many in the industry don’t expect the federal government to strictly enforce the ban, alcohol distributors will probably still refuse THC beverages if there’s any possibility they could lose their license, Gerrity explained.
Gerrity is also working to figure out how to destroy inventory if necessary.
“You can’t just click a button and destroy thousands of pallets,” he said.
Choi, meanwhile, has been reformulating his emulsions to be chemically stable in case they need to be diluted to comply with federal regulations.
Despite the volatility of the industry, Chura said that he’s still hopeful that the bans will be reversed, and is even thinking about a THC beer compliant with federal regulations – that is, one that only contains ۰.۴mg of THC. It’s still unclear whether such a product would be legal.
Chura noted that when he first began making Easy Man, retailers would only buy high-dose products from him, but his online sales revealed his customers actually prefer lower doses. He imagines a beer with ۰.۴mg of THC could be appealing to people who like “having a few and knowing they still can be responsible”.
