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Regulatory and Distribution Law Updates for the Alcohol Industry
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Regulatory and Distribution Law Updates for the Alcohol Industry
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Navigating the Buzz: How State Agencies Are Addressing Confusion Around Hemp and Low-Dose THC Beverages

by and | Oct 25, 2024 | , , ,

Hemp and low-dose delta-9 tetrahydrocannabinol (THC) beverages continue to flood the marketplace. Depending on the state, these products can be purchased in liquor stores, gas stations, grocery stores, bars, restaurants, and/or online. Despite their rise in popularity and presumed legality under the 2018 Farm Bill, some state agencies have recently made headlines with decisions to ban these products from being sold by alcohol-licensees in their states.

In this blog post, we walk through some recent examples of how different state alcohol agencies are handling the regulation of hemp and low-dose THC beverages.

Understanding Hemp and Low-Dose THC Beverages

As we mentioned in our previous blog post on this topic, hemp and low-dose THC beverages are nonalcoholic beverages infused with delta-9 THC derived from hemp, distinguishing them from traditional marijuana products. The 2018 Farm Bill legalized hemp and its derivatives, provided they contain no more than 0.3% THC on a dry weight basis. This legal gray area has led to a surge in products that can deliver psychoactive effects while being marketed alongside or as alternatives to alcohol.

State-by-State Overview

The rise of hemp and low-dose THC beverages in the market has prompted state alcohol, health, agriculture, and cannabis agencies to review their regulatory frameworks regarding the sale and distribution of these products. Each state approaches the issue differently, which has resulted in a patchwork of regulations across the country.

  • California: The California Department of Alcoholic Beverage Control (ABC) has taken a strict stance on hemp beverages containing THC. On October 3, 2024, the ABC issued an industry advisory stating that alcohol licensed businesses may not carry, market, offer for sale, or sell any industrial hemp products intended for human consumption (including food, beverages, and dietary supplements) that contain a detectable amount of total THC or other intoxicating cannabinoids. Any businesses that do not comply will subject the licensee to disciplinary action. To date, the ABC has already begun enforcement efforts. Recently, ABC agents have been reported visiting licensed locations across the state and seizing hundreds of products from several licensees, removing them from shelves and preventing them from being sold.
  • Massachusetts: On May 30, 2024, the Massachusetts Alcoholic Beverages Control Commission (ABCC) issued an advisory in connection with the joint notice issued by the Massachusetts Department of Public Health (MDPH) and the Massachusetts Department of Agricultural Resources (MDAR) regarding the sale of beverages and food with hemp-derived cannabinoid extracts (CBD) or THC. The ABCC made clear that it is unlawful to manufacture and/or sell food or beverages containing CBD and/or THC. This applies to alcoholic and nonalcoholic beverages. Under the advisory, the ABCC directed that products need to be removed immediately, and anyone found in violation faces potential revocation or suspension of its license. The joint notice and advisory each make clear that they only apply to hemp-derived CBD and THC products and are separate from marijuana products regulated by the Massachusetts Cannabis Control Commission.
  • Minnesota: In contrast to California and Massachusetts, Minnesota explicitly [...]

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Growing Regulatory Focus on ‘Crossover Alcohol Products’

by | Jul 10, 2024 | , , , , ,

As more companies – including businesses with and without experience producing alcoholic beverages – move to leverage their brands and brand equity across the beverage spectrum, regulators, trade associations and the companies themselves are focusing on ways to responsibly label, advertise, market and display these products to avoid consumer confusion and potential sales to minors.

Crossover alcohol products are generally categorized as alcohol beverages that use the products and intellectual property (e.g., brand names, logos) of a preexisting non-alcohol brand. While not legally defined (yet), such products include Dunkin’ Spiked Original Iced Coffee, Eggo Brunch in a Jar, Lipton Hard Iced Tea and SunnyD Vodka Seltzer, among others. As illustrated by these examples, products such as Lipton Hard Iced Tea leverage the non-alcoholic Lipton Iced Tea branding for a new product in the alcohol space.

As crossover alcohol products have become more prevalent across the market, state regulators have started taking notice and providing guidance to alcohol producers as to how to assure these products are not “false or misleading,” as defined by alcohol regulations, or tend to induce minors to drink the alcoholic product either through the products’ labels, packaging or store-display locations. The Commonwealth of Virginia, in particular, has taken the lead through the issuance of Circular Letter 23-01, which provides guidelines for alcohol producers as they develop these products. These guidelines focus on the following, among other issues:

  • Ensuring that the crossover product clearly indicates the type of alcohol it contains, with such information visible in at least three to six different locations.
  • Ensuring that the sizes of the alcohol references and warnings are sufficiently large and noticeable in comparison to other writings on the product label.
  • Ensuring that any and all changes to product labels, containers and secondary packaging clearly distinguish the crossover products from the original non-alcoholic products so as to prevent consumer confusion; such changes may involve the color palette, font type, imagery, placement of words, images and descriptions, or background elements.
  • Ensuring that secondary closures, such as foil lids, plastic wrapping, lip guards, stickers or other “child-proof” packaging, are present, to prevent accidental consumption by a minor.

Recently, a coalition including the Distilled Spirits Council of the United States (DISCUS), Wine & Spirits Wholesalers of America (WSWA), FMI – The Food Industry Association, and the National Association of Convenience Stores (NACS) (representing the three tiers of the industry: suppliers, wholesalers and retailers), issued a joint commitment related to the responsible marketing and merchandising of crossover alcohol products. Similar to Virginia’s guidance, the coalition is focused on assuring that these products are not confused for their non-alcohol counterparts and do not appeal to those under the legal purchase age, based on the appeal of the underlying brand. Accordingly, the coalition looks to alcohol producers to commit to responsible production, packaging and marketing of crossover alcohol products by:



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