Minnesota’s booming industry of intoxicating products made from hemp—including beverages and gummies—is reeling from a ban on their products that is making its way through Congress in a bill aimed at reopening the federal government.
The bill gives the industry 365 days before all products containing more than 0.4 milligrams of THC—a trace amount—are outlawed. Christopher Lackner, president of the Hemp Beverages Alliance, hopes this timeline will give the industry enough time to lobby against the provision, which he called “arbitrary” and “punitive.”
He is banking on “a pushback from consumers, suppliers and distributors, and everyone else in the supply chain” who 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.
### Legal Background and Industry Growth
The 2018 Farm Bill legalized hemp by removing it from the federal definition of marijuana under the Controlled Substances Act, treating it instead as an agricultural commodity. This legislation also opened the door to the production of “intoxicating” products derived from hemp.
Minnesota quickly led the nation in capitalizing on this redefinition. According to Whitney Economics’ latest THC Beverage Report, total U.S. THC beverage sales topped $1.1 billion in 2024, with Minnesota playing a key role in this growth.
### Industry Opposition and Concerns
However, the success of hemp-infused products has come at a cost. Competing industries—including the nation’s nascent legal marijuana market and the beer and spirits industries—lobbied aggressively to close what they considered a “loophole” in the 2018 Farm Bill that enabled the explosion of hemp-infused products.
Both the marijuana and alcohol sectors argue that hemp products are largely unregulated and claim that some contain dangerously high amounts of THC. They also point out the lack of labeling and marketing restrictions, as well as the absence of measures to prevent THC-infused drinks and edibles from reaching children.
### Lobbying and Congressional Action
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 proposed by Sen. Rand Paul (R-Ky.). This amendment would have removed the hemp product restrictions from the government 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 stated.
Their argument prevailed. The legislation that would end the shutdown includes three appropriations bills to fund several government agencies through fiscal year 2026, including the U.S. Department of Agriculture—where the hemp provision was inserted. All other federal agencies received short-term funding until the end of January under a continuing resolution (CR).
### Political Responses and State Regulation Concerns
While the hemp industry lost its lobbying fight, it retained supporters in the U.S. Capitol. Sen. Rand Paul blocked Senate GOP leaders from obtaining unanimous consent to fast-track the shutdown bill, which ultimately overcame a six-week Democratic filibuster on a 60-40 vote Sunday evening.
The Senate voted to table Paul’s amendment by a margin of 76-24. Minnesota Senators Amy Klobuchar and Tina Smith were among the minority who supported removing the hemp language.
A spokesperson for Klobuchar stated, “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.”
Lackner emphasized that federal lawmakers are 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.
### Industry Impact and Future Outlook
Steve Brown, CEO of Nothing but Hemp—a Minneapolis-based company producing THC-infused gummies, beverages, and emulsions for breweries—warned that the shutdown bill could push his business to pivot fully into the marijuana industry.
If the legislation is signed into law by President Donald Trump, as expected, the manufacture and sale of his products would become illegal under federal law, severely impacting his market.
Brown explained that liquor stores would no longer be able to stock his beverages, and small breweries utilizing THC-infused drinks to counter declining beer sales would be breaking federal law by continuing to offer them.
Retailers such as Target would likely stop selling THC-infused beverages and other products, since customers would be unable to pay with credit cards due to federal banking regulations. Additionally, shipping THC-infused products across state lines would also become illegal.
“I think it’s wrong from every angle,” Brown said of the hemp provision in the shutdown legislation.
Brown noted that he manufactures close to 2 million cans of beverages annually. His operation is small compared to other Minnesota companies but significant nonetheless. He started his business at a kiosk with a sign that said “Try CBD,” a non-intoxicating hemp component touted for its medicinal value.
If hemp-infused drinks and edibles are outlawed, Brown is preparing to transition Nothing but Hemp—which currently employs 60 people—into a marijuana business.
### State and Legal Perspectives
Jim Taylor, spokesperson for the Minnesota Office of Cannabis Management, said the office “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 added.
Minnesota Attorney General Keith Ellison recently joined 38 other attorneys general in signing a letter warning that 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 maintain neutrality on the issue but acknowledged concerns.
“Our state’s hemp growers 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,” Ladd said.
“I get regulations and guardrails for hemp products,” he added. “But an arbitrary change in the definition of hemp is not a substitute for measured regulation.”
### Legislative Status and Political Fallout
The U.S. Senate gave final approval to the shutdown bill late Monday. The legislation now heads to the U.S. House, where Minnesota’s Democratic representatives are expected to join Senators Klobuchar and Smith in opposing the bill.
The Senate vote ended the longest government shutdown after eight moderate Democrats dropped their opposition. They cited GOP offers to protect programs from budget cuts proposed by President Trump and a promise from Senate Leader John Thune to hold a vote on extending Affordable Care Act subsidies as reasons for their support.
However, the deal sparked criticism from Democratic colleagues and voters alike. Rep. Angie Craig (D-2nd District) posted on social media, “If people believe this is a ‘deal,’ I have a bridge to sell you.”
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Minnesota’s hemp industry now faces an uncertain future as federal and state policymakers wrestle with how to regulate intoxicating hemp products moving forward.
https://www.minnpost.com/national/washington/2025/11/minnesotas-hemp-produced-thc-beverage-and-edible-industry-reels-from-provision-to-outlaw-products-in-shutdown-bill/