Just after popping the lid off a new market, hemp beverage makers fear a proposal to ban intoxicating hemp products in Illinois would end their new business.
The proposed ban by lawmakers is meant to rein in a wild west of hemp products that includes knockoff and mislabeled edibles and vapes that are sold without age limits or regulations. But producers say lawmakers can save businesses and jobs by tightly regulating and taxing hemp instead.
“Banning and killing this segment of the industry, with no process to discuss what to do, seems really excessive and unfair,” Marz Community Brewing Co. founder Ed Marszewski said.
Hemp beverages have been a lifeline in the past year or so for craft brewers, who’ve seen beer sales fall since the COVID-19 pandemic.
In Minnesota, where hemp beverages are regulated and taxed, they are generating sales taxes of more than $1 million a month.
Mars’ brewpub in McKinley Park began making hemp beverages like Power of Flower and Juniper Fizz in 2019. Some contain CBD, the nonintoxicating component of hemp, while others contain THC, the part of pot that gets users high.
Other brewers like Hopewell Brewing in Logan Square, Noon Whistle Brewing in Lombard and Naperville, and Engrained Brewing in Springfield also make hemp drinks.
The Illinois Craft Brewers Guild has 300 member companies that employ about 6,000 people, but reports about 40 breweries closed in the past two years.
“The fact that members can access a new revenue stream is incredibly important,” Executive Director Ray Stout said. “This ban could pull the rug out from beneath our feet.”
The ban, as originally proposed by state Sen. Kimberly Lightford, would put a two-year moratorium on all intoxicating hemp products, including those sold widely at vape shops and gas stations, until a committee can propose regulations. A newer version, put into an existing bill for fast approval, would allow the sale of products, but only by businesses licensed under the current state cannabis law.
Hemp business owners say that would cause widespread closures of businesses and put many people out of work. Instead, they are calling for restricting products to adults 21 and older, requiring testing and labeling of potency and purity, and imposing a wholesale tax of 10% plus a retail tax of 10%.
State-legal cannabis companies have pushed for the legislation, saying it’s unfair they have to follow tight restrictions while hemp businesses are unchecked.
While marijuana remains illegal under federal law, federal lawmakers legalized hemp in 2018, defining it as cannabis or cannabinoids with less than 0.3% delta-9 THC. But processors have figured out how to derive intoxicating cannabinoids, such as delta-8 and delta-9 THC, from hemp, creating the current controversy.
Further complicating the matter, some licensed cannabis companies also produce hemp-derived products.
Tiffany Ingram, executive director of the Cannabis Business Association of Illinois, representing licensed weed companies, called the hemp products “Frankenstein weed” that tests have shown sometimes contain contaminants or much higher or lower doses than labeled.
“This is why Illinois needs to push pause on these products,” she said.
While there are some bad actors, hemp brewers like Marszewski say responsible companies use the same labs as cannabis companies to accurately test and label their products, and deserve a chance to sell their nonalcoholic drinks.
Marszewski sees the ban as a money grab by billion-dollar cannabis companies to eliminate their startup competition.
“The hemp industry allows people who don’t have deep pockets to start a business, employ people and pay taxes,” he said. “These attacks are merely a way for cannabis companies to maintain their monopoly.”
