Between Drinks

The end of September, typically signals to the start of the holiday season and gatherings of friends and family, but for many Sept. 30 has a greater significance as it marks the end of the 2018 Farm Bill.

According to the USDA website, the bill “authorized the production of hemp and removed hemp and hemp seeds from the Drug Enforcement Administration’s (DEA) schedule of Controlled Substances,” the website states. “It also directed the U.S. Department of Agriculture (USDA) to issue regulations and guidance to implement a program to create a consistent regulatory framework around production of hemp throughout the United States. The establishment of hemp as a regulated commodity also paves the way for U.S. hemp farmers to participate in other USDA farm programs.”

Through this authorization, the U.S. market has seen legal cannabis sales proliferate. According to research from BDSA, Louisville, Colo., legal cannabis sales totaled $29.5 billion in 2023, and were expected to reach $32.4 billion in 2024. Globally, legal cannabis spending totaled $36 billion in 2023, highlighting how the growth of legal sales can be attributed to the U.S. market.

“U.S. adult-use markets currently represent approximately 56% of total global cannabis sales, and are poised to claim an even larger share of global sales in the coming years as U.S. medical markets contract,” said Roy Bingham, co-founder and CEO of BDSA, in a June 2024 release. “The cannabis industry is incredibly dynamic, with each market facing unique regulatory changes and industry pressures. Looking ahead to 2028, emerging adult-use states, particularly those on the East Coast and in the Midwest, are expected to contribute the strongest increase to total U.S. and global sales.”

Yet, as the expiration of the 2018 Farm Bill approaches, industry stakeholders are highlighting the impact this has had on the market and next steps that policymakers can take to support a regulated market.

“The 2018 Farm Bill opened the door to a booming, underregulated marketplace for intoxicating U.S. consumer products ― like beverages ― containing various types of hemp-derived THC (the same intoxicating compound found in cannabis),” says Wine & Spirits Wholesalers of America President and CEO Francis Creighton. “However, because the bill addressed hemp as an agricultural product, many questions remain about the legal status of products that contain hemp-derived THC.”

“Since 2018, the hemp industry has expanded under the auspice of the 2018 Farm Bill and hemp-derived intoxicating products have proliferated across the country without federal regulation or oversight ― including important public health and safety measures like establishing a prohibition on synthetic hemp-derived THC intoxicating products or standards for testing and labeling.”

– Wine & Spirits Wholesalers of America President and CEO Francis Creighton

Creighton explains that the bill defined hemp as cannabis sativa L. with a Delta 9-tetrahydrocannabinol (D9-THC) concentration of 0.3% or less on a dry-weight basis. It also allowed for the transfer of authorized hemp across state lines. Additionally, the bill prohibited states from placing many restrictions on the sale, transport or possession of hemp products in a way consistent with the law.

However, because the language of the bill defined hemp as an agricultural product, questions remained regarding its legal status regarding products that contain hemp-derived THC.

“Since 2018, the hemp industry has expanded under the auspice of the 2018 Farm Bill and hemp-derived intoxicating products have proliferated across the country without federal regulation or oversight ― including important public health and safety measures like establishing a prohibition on synthetic hemp-derived THC intoxicating products or standards for testing and labeling,” Creighton explains.

Creighton further explains that the 2018 Farm Bill did not alter the federal Food, Drug and Cosmetic Act (FDCA), which declares that any product that contains THC is “adulterated” and unauthorized for interstate sale. What has been done is some states taking legislative action to regulate the sale of these products.

“While some states have enacted state-level regimes allowing the sale of products that contain THC, much confusion remains about the status of these products,” Creighton says. “There are currently over 100 bills in 34 state legislatures that are seeking to put guardrails around hemp-derived intoxicating products, including hemp-derived intoxicating beverages.

“However, many states have no regulatory framework for the retail sale or distribution of intoxicating hemp,” he continues. “Both in the absence and presence of regulation, states have seen sales of intoxicating hemp-derived products flourish. However, those without regulation leave their markets open to access by minors, unreliable or inauthentic products, and myriad other issues reminiscent of an unregulated alcohol market.”

Given some of the uncertainties related to hemp-derived products, policymakers have discussed bans to intoxicating hemp products from the market. However, Creighton and the WSWA have noted that prohibition is not the answer.

“The genie is out of the bottle; the toothpaste can’t be put back into the tube ― however you say it, the simple truth is that prohibition isn’t the answer,” Creighton said in a statement in May 2024. “This is a lesson America already learned and the alcohol industry now has nearly a century of safe, effective distribution and regulation under its belt.”

Creighton calls attention to the success of the three-tiers within the United States for the manufacturing, sale and distribution of beverage alcohol as a model for intoxicating hemp-derived products.

“WSWA supports the comprehensive federal regulation of hemp-derived THC and is the first alcohol industry trade association to publicly support the legalization of adult-use cannabis and to brief Members of Congress on comprehensive federal regulations for these products based upon the success and efficacy of the U.S. alcohol regulatory model,” Creighton says. “The 2018 Farm Bill expires in September 2025.

“With the current uncertainty around the regulatory status of intoxicating hemp products, WSWA believes that, like beverage alcohol, the next Farm Bill should explicitly allow for the production of only naturally derived THC products from hemp (specifically Delta-9) while granting individual states primary authority to regulate distribution and retail sales, including state-level prohibition, to adults over the age of 21 within their own borders,” he concludes.