Legally Grown- Episode 3: Hemp-Based Beverages Transcript - Norris McLaughlin, P.A., Attorneys at Law

Episode 3: Hemp-Based Beverages

Transcript: Ben Sheppard

Welcome to Norris McLaughlin’s Legally Grown, a limited podcast where we weed through the topics of cannabis law in New Jersey and Pennsylvania, and beyond. I’m your host, Ben Shepard, associate in the Cannabis Law Group at Norris McLaughlin. In this episode, we will be covering hemp beverages.

As you’re probably aware, nonalcoholic hemp beverages are becoming more common. You probably have seen various items, whether it’s the heirloom beverages, the cycling frog beverages, or the delta cannabis water. And you’re seeing them more and more, and you might see them popping up at gas stations, you know.

Distributors in Pennsylvania, even though they’re not supposed to sell that, but you might be seeing in New Jersey, but in fact, some states are using these beverages as a test run for adult recreational cannabis. For example, in Minnesota, officials are ruling out adult-use cannabis by allowing grocery stores like Cub.

For those who aren’t from Minnesota, or I’m not from Minnesota, but don’t know Minnesota grocery stores like I do, Cub’s, a major grocery store there to sell low THC beverages that are derived from hemp right at the checkout line. You can pick it up with your side of bread, your groceries, your fried chicken, et cetera.

What a fantastic meal. And these products can only be purchased by individuals who are over 21 and they can be sold at they can be sold at various areas. And now we’re even seeing these products crop up at major retailers. So, stores like total wine, more selling these products. In fact, Other major players in the alcoholic beverage space, like Pabst, are offering hemp-derived seltzers.

And in fact, Pabst has a whole laboratory for these things. As the saying goes, as Pabst goes, so goes the nation. However, if you are looking at the laws, and perhaps you’re interested in starting a business in this area. Manufacturers need to understand the laws at play both at the federal level and at the state level.

Federally, the 2018 Farm Bill removed hemp derivatives of cannabis with extremely low concentrations of Delta 9 THC. And remember specifically from previous podcasts, no more than 0.3 percent Delta 9 THC on a dry weight basis. Now importantly under federal law happens to find as the plant cannabis sativa L and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not with a Delta nine THC concentration, not more than 0. 3 percent on a dry weight basis. As we talked about previously, this would naturally encompass other varieties of THC that are found in the hemp plants such as Delta 8 THC, Delta 10 THC, and also cannabinol or CBD as we know it as. So accordingly, these products can be marketed under federal law and sold in interstate commerce.

Yep, that’s right. Many help hemp beverages such as Delta cannabis water. They ship your hemp drinks. through the United States Postal Service or FedEx directly to your door or your apartment. And that’s largely because of the farm bill. Now, I also want to remind you that there are other players involved as well.

As we talked about in other episodes, the FDA plays a role. The Food and Drug Administration. The FDA has not promulgated regulations specifically regarding the sale of these hemp products. In fact, James Comer of Kentucky of the United States Congress has chastised the FDA. And its officials for not promulgating these regulations, believing it allows for dangerous products to be sold.

However, the FDA has issued warning letters and incurred and stated that manufacturers selling various hemp products must pull these products from shelves. These are where they include misleading health claims, or they’re marketed towards children. So, they might be things that look like Cheetos or Sour Patch Kids.

Those are the products that they’re very, very leery of. So, you don’t want to make misleading health claims and you don’t want to make this look like a, like a kid’s drink or something like that. So, you wouldn’t want to make something like a Go-Gurt looking hemp drink or something like that. At the state level, I would note it’s a patchwork of laws and regulations.

As we previously talked about, some states like Minnesota and Tennessee, They actually have somewhat embraced regulation in these situations. They require specific labeling. They require testing. They require these products to be sold to people who are, must be at least 21. As we talked about, and that’s kind of been a recurring theme in our episodes, are we can embrace regulation to make things safer for people and allow people who are going to consume these products more knowledgeable about these contents.

Now, other states like Pennsylvania and New Jersey have not promulgated these regulations. It’s my opinion that these states generally legalize hemp products. That being said, they’re, especially in Pennsylvania, other people have taken different positions and we’ve seen that there’s been raids and prosecutions for people who are selling hemp products under the equivalent Pennsylvania’s state-level farm bill.

But enforcement remains murky whether or not what police are going to do. And we’re not really aware of these impacting suppliers. They seem to be at this level. more targeted towards retailers of these products. What I wanted to say though is individuals looking to enter the space need to remember that even though the farm bill says one thing, you have to look at each state that you’re interested in selling the product.

You can’t say carte blanche that because the federal law allows me to do something. that Pennsylvania, Arizona, Oklahoma, Texas, et cetera. They may have a different opinion on this and you need to understand and appreciate those laws. There’s about approximately four states that outlaw these products. You ship to a state that outlaws those products.

You have a problem, and you have to be aware of those issues. And you want to talk to counsel and you want to do your research before you’re shipping these products. And finally, too, the other thing I want to just say is, Even though you might not have a rate, uh, a labeling requirement in Pennsylvania or New Jersey, don’t we want to be good stewards and good, good business people by informing people what’s inside these?

Inform people about the level of THC content. Inform people about the level of CBD content. Right on the cans, what are the effects of these? Disclose the psychoactive effects. Potentially mention that these are not safely operated with heavy machinery or driving a car. Also, note that these effects can be delayed too.

It may take up to two hours for these effects of THC to kick in. People should be aware of that. And also too, and I think manufacturers need to think about this, think about the serving size of the cans. Even though you can maybe put four or six servings in a can, it might be a better and more prudent thing to only have it be a one serving can that has a smaller concentration, more of a light beverage.

If someone wants to go back, they have to make the conscious effort to go back. and get a second can. They’re more cognizant of how much they’re consuming, what they’re putting in their body. And the other thing too is we have to keep in mind is oftentimes people when they’re on the younger side, they sometimes might shotgun something or they may end up just chugging something.

We don’t want to do that because if you’re getting four servings of something, that can be very, very potent, especially for people that aren’t consuming THC on a regular basis. So, we want to be good stewards, as I said. And even though there isn’t maybe a regulation per se, other than as I’ve generally said about the FDA having this, that they oppose misleading health claims or they things are marketed almost like geared towards kids, even though they’re mainly an enforcement agency, they don’t approve the product.

We should think about ways that we can make these products more safer and make people more knowledgeable about these products. So, we don’t have the adverse effects. And on top of that, that people aren’t scared of cannabis, or they aren’t scared of hemp, and they can understand this new category of beverage that’s coming onto the scene.

And we can also work with regulatory officials to make them safer and lawmakers. So that’s how I want to just say, just very generally about marketing hemp beverage. You know, this is something that I think very interesting and something that we’re probably going to see more and more of. So, I’m happy to answer any questions that any listeners may have or anybody who’s interested in going in this space.

It’s going to only be a growing category as we see more of these beverages go online. Um, and we’re seeing that with different beverages too, such as adaptogens that are coming, coming online. Just saw that one of my favorite local breweries that they have now adaptogen drinks that have different feelings as well.

And we’re going to start seeing as big, and so to speak, when the big players like Pabst get involved, we’re only going to see more and more of these hemp beverages. And when we see more retailers like major supermarkets like Cub and we see major alcohol retailers like total wine and more. We’re just going to see these things become more in common.

So, while we traditionally thought of these beverages as having three categories, wine, beer, and distilled spirits, we may be seeing hemp move into that fourth category. As consumer tastes change, people are just drinking less, and they’re thinking about becoming more California sober. So, with that in mind that concludes our latest episode on hemp beverages.

So, we gave you a nice overview of federal law and we’ll kind of give you a little bit of overview of the patchwork of state laws. So, this has been Norris McLaughlin’s Legally Grown, a limited podcast series where we weed through the topics of cannabis law in New Jersey and Pennsylvania, and beyond. I want to thank you, the listener, for being a part of the conversation. Be sure to tune in next time for a brand-new episode. If you’d like to learn more, please email me at legallygrown@norris law. com.