Politics
Minnesota Hemp Businesses And Senators Say Federal THC Ban Will Hurt The State’s Economy
“Senator Klobuchar voted against the hemp provision because she thought it would hurt the state’s small businesses.”
Minnesota’s booming industry of intoxicating products made by hemp, including beverages and gummies, is reeling from the ban on their products that is making its way through Congress in a bill that would reopen the federal government.
The bill gives the industry 365 days before all products that contain more than 0.4 milligrams of THC—a trace amount—are outlawed. Christopher Lackner, president of the Hemp Beverages Alliance, is hoping that gives the industry time to lobby against the provision, which he called “arbitrary” and “punitive.”
He said he’s betting on “a pushback from consumers, suppliers and distributors and everyone else in the supply chain” that will be impacted by the impending ban on hemp-produced THC-infused products.
“Our hope as an industry is that Congress will come back and meet with all of the stakeholders and build a federal framework for hemp beverages that works,” Lackner said.
The 2018 Farm Bill legalized hemp by removing it from the federal definition of marijuana under the Controlled Substances Act and treating it as an agricultural commodity. It also opened the door to the production of “intoxicating” products derived from hemp.
Minnesota led the nation in taking advantage of the redefinition of hemp. Whitney Economics’ latest THC Beverage Report estimated that total U.S. THC beverage sales topped $1.1 billion in 2024, with Minnesota being a key state in this growth.
Success has come at a price, however. Competing industries, mostly the nation’s nascent legal marijuana industry and, more recently, the beer and spirits industries, lobbied furiously to close what they considered a “loophole” in the 2018 Farm Bill that has led to the explosion of hemp-infused products.
The marijuana and alcohol industries say hemp products are largely unregulated and some contain dangerously high amounts of THC. They also say there are no labeling and marketing restrictions or efforts to keep THC-infused drinks and edibles from children.
On Monday, the Beer Institute, the Distilled Spirits Council of the United States and other alcohol trade groups sent a lobbying letter to members of Congress, urging them to reject an amendment by Sen. Rand Paul, R-Ky., that would have stripped the language from the shutdown bill.
“Manufacturers of beverage alcohol, one of the most highly regulated consumer products, urge the Senate to reject Paul’s attempts to allow hemp-derived THC products to be sold devoid of federal regulation and oversight across the country,” the letter said.
Their argument won the day.
The legislation that would end the shutdown contains three appropriations bills to fund several government agencies through fiscal year 2026, including the U.S. Department of Agriculture, and that’s where the hemp provision was inserted. All other federal agencies would receive short-term funding—until the end of January—under a continuing resolution, or CR.
While the hemp industry lost its lobbying fight, it did have supporters in the U.S. Capitol. Paul, for instance, prevented Senate GOP leaders from obtaining unanimous consent to fast-track the shutdown bill, which overcame a six-week Democratic filibuster Sunday evening on a 60-40 vote.
The U.S. Senate voted to table—or reject—Paul’s amendment, on a 76-24 vote. Minnesota Sens. Amy Klobuchar (D) and Tina Smith (D) were in the minority supporting the effort to strip out the hemp language.
“Senator Klobuchar voted against the hemp provision because she thought it would hurt the state’s small businesses and believes efforts by Congress to regulate hemp products should account for states like Minnesota that already have strong regulations in place,” a spokesman for Klobuchar said.
Lackner also said that lawmakers in Congress were trampling on the rights of states to regulate intoxicating hemp products.
“This is a slap in the face of states like Minnesota that have developed regulatory frameworks based on stakeholder input,” he said.
Hemp change ‘wrong from every angle‘
Steve Brown, CEO of Nothing but Hemp, a company in northeast Minneapolis that makes THC-infused gummies and beverages, emulsions for breweries and many other hemp-based products, said the shutdown bill may drive him to cross over to the marijuana industry.
That’s because if the legislation is signed into law by President Donald Trump, as expected, the manufacture and sale of his products will be illegal under federal law, with a huge impact on his market.
Brown said liquor stores could no longer offer his drinks on their shelves. Small breweries, which have tried to combat a drop in beer sales by offering THC-infused drinks that are more popular than alcohol among the young, would also be breaking federal law if they continued to offer those libations.
And retail stores, including Target, would likely stop selling THC-infused beverages and other products because customers would no longer be able to pay for them with their credit cards due to federal banking regulations.
Shipping THC-infused products across the state lines would also be against federal law.
“I think it’s wrong from every angle,” Brown said of the hemp provision in the shutdown legislation.
Brown said he manufactures close to 2 million cans of beverages a year and that his operation of THC-infused drinks is small compared to other companies in Minnesota.
He said he started his business at a kiosk with a sign that said “Try CBD,” a hemp component that is not intoxicating and is touted for its medicinal value. If hemp-infused drinks and edibles are outlawed, Brown says he’s preparing to turn Nothing but Hemp, which has 60 employees, into a marijuana business.
Jim Taylor, spokesman for the Minnesota Office of Cannabis Management, said it “is reviewing any draft or proposed [hemp] language for its impact on Minnesota.”
“This is a complex policy issue, and we are reviewing it with the Attorney General,” Taylor said.
Minnesota Attorney General Keith Ellison recently signed a letter with 38 other attorneys general that said unregulated THC products pose a threat to the general public.
David Ladd, president of the Minnesota Industrial Hemp Association, said his group has tried to stay as neutral as possible on the issue. But he said the state’s hemp growers also do not want to “stifle innovation and investment” in hemp, which can be used to produce a wide variety of products, including biofuels, paper and textiles.
“I get regulations and guard rails for hemp products,” Ladd said. “But an arbitrary change in the definition of hemp is not a substitute for measured regulation.”
The U.S. Senate gave final approval of the shutdown bill late Monday. Now the legislation heads to the U.S. House, where Minnesota’s Democratic House members are expected to join the state’s two Democratic senators—Klobuchar and Smith—in rejecting the legislation.
So the longest government shutdown is on the way to an end after eight moderate Democrats in the U.S. Senate dropped their opposition to the bill. They said GOP leaders offered a fair deal because the legislation would protect programs from Trump budget cuts and Senate Leader John Thune (R-SD) promised a vote on the extension of Affordable Care Act subsidies Democrats had sought to in return for their votes to reopen the government.
That provoked an onslaught of criticisms from Democratic colleagues—and Democratic voters.
Rep. Angie Craig, D-2nd District, for instance, posted on social media that ”if people believe this is a ‘deal,’ I have a bridge to sell you.”
This article first appeared on MinnPost and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
