Beer Industry Trade Group Applauds California Governor’s Crackdown On Hemp Products With THC

A major alcohol trade association is applauding California Gov. Gavin Newsom’s (D) newly proposed emergency regulations to outlaw intoxicating hemp-derived cannabinoids and require all CBD products be completely free of THC.

The head of the Beer Association, which represents American brewers, importers and industry suppliers, touted its “longstanding commitment to responsible drinking” in comments issued Monday morning and said Newsom’s proposal will close “an unintended loophole” created with the passage of the 2018 Farm Bill, which legalized hemp federally.

“The Beer Institute thanks Governor Newsom for his leadership in closing an unintended loophole that has enabled the proliferation of unregulated intoxicating hemp products,” Brian Crawford, the group’s president and CEO, said in a statement. “Intoxicating hemp products are being sold as food and beverages, despite not being deemed safe for the U.S. food supply by federal regulators, and in some cases without age restrictions.”

“The beer industry is proud of our longstanding commitment to responsible drinking,” added Crawford, “and to operating in full compliance with a multitude of state and federal regulations.”

The Beer Institute said in an email that its position “aligns with a bipartisan coalition of 21 state attorneys general” who wrote a letter in March urging Congress to amend federal law so that intoxicating cannabinoids are not included in the federal definition of hemp.

More broadly, the Beer Institute has kept its distance from marijuana. It says on a policy page that while members “strongly believe voters should determine whether their state should legalize the sale of marijuana,” the group itself remains neutral on legalization. It further argues that it’s “misleading to compare marijuana to beer.”

“Beer is distinctly different, both as a product and as an industry,” the trade association contends. “Americans welcome beer at nearly every occasion because beer’s moderate alcohol content means it can be enjoyed sensibly. Brewers and beer importers are committed to responsible consumption, advertising, community service and working with law enforcement to promote public safety.”

“Many urgent questions remain unanswered about marijuana,” the group adds, “on issues such as measuring impairment while driving, workplace liability, and the lack of science on marijuana’s impact on personal health.”

The Beer Institute’s comments come on the heels not only of Newsom’s announced emergency regulations but also a new analysis that concludes marijuana legalization may pose a “significant threat” to the alcohol industry. The report from Bloomberg Intelligence (BI) projects that slumping sales of wine and spirits “may extend indefinitely,” stemming largely from increased consumer access to legal cannabis.

While there are indeed unanswered questions about the risks of cannabis consumption, excessive alcohol consumption kills about 178,000 Americans each year, according to the Centers for Disease Control and Prevention. Meanwhile, drunk driving is responsible for nearly a third of all traffic fatalities—a proportion that’s grown in recent years.

Data from the U.S. National Alcohol Survey published earlier this year also show that Americans report more secondhand harm from alcohol use than from marijuana or even opioids.

More than a third (34.2 percent) said they’d experienced secondhand harms related to alcohol use over the course of their lives, that survey found. Just 5.5 percent, meanwhile, said they’d ever experienced secondhand harms related to cannabis.

Harms from alcohol included family and marriage difficulties, traffic accidents, vandalism, physical harm and financial difficulties.

As for cannabis, a higher prevalence of secondhand harm was found among Black people—though authors noted that may harms may stem from punitive policies around marijuana rather than the drug itself.

“This may derive, at least in part, from systemic differences,” they wrote. “Black individuals are more likely than their white counterparts to face legal repercussions from cannabis use and to be randomly drug tested, resulting in financial harms (e.g., paying legal fees after an arrest, losing a job) and family difficulties (e.g. marital disputes and stress, having children taken away) that could negatively impact those around them.”

Meanwhile, a multinational investment bank similarly said in a report late last year that marijuana has become a “formidable competitor” to alcohol, projecting that nearly 20 million more people will regularly consume cannabis over the next five years as booze loses a couple million drinkers. It also says marijuana sales are estimated to reach $37 billion in 2027 in the U.S. as more state markets come online.

Another study out of Canada, where marijuana is federally legal, found that legalization was “associated with a decline in beer sales,” suggesting a substitution effect.

The analyses comport with other recent survey data that more broadly looked at American views on marijuana versus alcohol. For example, a Gallup survey from last month found that respondents view cannabis as less harmful than alcohol, tobacco and nicotine vapes—and more adults now smoke cannabis than smoke cigarettes

A separate survey released by the American Psychiatric Association (APA) and Morning Consult last June also found that Americans consider marijuana to be significantly less dangerous than cigarettes, alcohol and opioids—and they say cannabis is less addictive than each of those substances, as well as technology.

Additionally, a poll released in July found that more Americans smoke marijuana on a daily basis than drink alcohol every day—and that alcohol drinkers are more likely to say they would benefit from limiting their use than cannabis consumers are.

Similarly, a separate study published in May in the journal Addiction that similarly found that there are more U.S. adults who use marijuana daily than who drink alcohol every day.

In California, the emergency regulations unveiled last week by Newsom’s office are the latest attempt to rein in the proliferation of products that contain intoxicating hemp-derived cannabinoids. The changes would outlaw hemp products with any “detectable amount of total THC.” Hemp products without THC would further be limited to five servings per package, and sales of the products would be restricted to adults 21 and older.

The proposal came less than a month after the state legislature effectively killed a governor-backed bill that would have imposed somewhat similar restrictions on intoxicating hemp-derived cannabinoids.

Newsom said in a press conference last week that he expects the new rules to take effect after a “very short” administrative process.

Department of Cannabis Control Director Nicole Elliott in a statement last week called the proposed rules “a critical step in ensuring the products in the marketplace align with the law’s original intent,” saying the agency is “committed to working with our state partners to enforce state law.”

Some advocates, however, have raised concerns that the proposed rules are impracticable. Dale Gieringer, the director of California NORML, has said the strict limit on THC would effectively outlaw even hemp products not intended to be intoxicating.

“This is an overly broad regulation that would harm many medical users who rely on high-CBD extracts to treat childhood epilepsy, cancer and other serious conditions,” Gieringer told Marijuana Moment. He added that California NORML has heard worries from doctors who recommend high-CBD hemp extracts to patients.

Jonathan Miller, general counsel for the trade group U.S. Hemp Roundtable, was even sharper in criticizing the governor’s proposal, called the plan “a betrayal of California hemp farmers, small businesses, and adult consumers.”

“Instead of addressing legitimate regulatory concerns shared by all good actors in the cannabis space—such as establishing reasonable policies to keep intoxicating products out of the hands of children—Governor Newsom instead has proposed a complete retail prohibition on 90-95% of popular hemp products for adults,” Miller said in a statement, “including most non-intoxicating CBD products that he purports to support in his public communications.”

Miller said the U.S. Hemp Roundtable “will be exploring all legal options in the coming days with California hemp farmers and businesses that comprise the multi-billion-dollar industry that this action would destroy.”

Newsom said at a press conference Friday that “we don’t want to kill the hemp industry. We want the hemp industry to be regulated.”

The California Cannabis Industry Association (CCIA), which represents marijuana businesses in the state, applauded the governor’s proposal. CCIA had also supported the legislation earlier this year, AB 2223, that would have similarly restricted hemp-derived cannabinoids.

“We commend Governor Newsom’s decisive action to address intoxicating hemp products in California, protecting public health and ensuring that harmful, unregulated products no longer undermine our state’s rigorous cannabis laws,” Laura Fogelman, a volunteer board member for CCIA, told Marijuana Moment in an email. “These emergency regulations will create a safer, more transparent marketplace while safeguarding our youth and preserving the integrity of—and critical tax revenues from—California’s cannabis legalization framework.”

“To be clear,” Fogelman added, “we believe there is a place for hemp-derived products in the cannabis ecosystem, once we establish parity and regulate cannabinoids based on intoxication, regardless of their source.”

Newsom also expressed hope at Friday’s press conference about working with Assemblymember Cecilia Aguiar-Curry (D), who sponsored the legislative plan to restrict intoxicating hemp products, in the coming legislative session.

“We believe hemp—even hemp with intoxicating components—can be sold,” the governor said, “but they must be sold in a regulated environment, not in grocery stores, not in corner stores all throughout the state of California.”

Aguiar-Curry’s bill, AB 2223, would have done more than just outlaw intoxicating hemp products. As written, it would have folded hemp-derived cannabinoid products into the state’s regulated marijuana system and opened the door to out-of-state hemp producers to sell products into California’s cannabis market.

Products with any detectable amount of THC or other intoxicating cannabinoids would need to be sold through state-licensed cannabis dispensaries under AB 2223. So called “pure CBD” products would not be subject to that rule, but those products could not contain any detectible amount of THC or any other intoxicating cannabinoid.

Newsom said he hoped to partner with Aguiar-Curry next year “to address some of the integration issues” that come with moving intoxicating hemp products under the state’s regulatory system for marijuana.

The advocacy group Origins Council, which says it represents about 800 small and independent cannabis businesses in rural counties throughout the state, was one of the lead advocacy groups pushing back on AB 2223 this session. In comments to Marijuana Moment, however, the group applauded Newsom’s emergency proposal to outlaw hemp-derived cannabinoids.

“Legalizing hemp under the 2018 Farm Bill, while maintaining federal prohibition on cannabis, was always going to lead to absurd outcomes,” said Ross Gordon, Origins Council’s policy chair. “Ultimately, the only path forward is to federally legalize cannabis, and to regulate hemp and cannabis at parity from farm to retail.”

“In the meantime,” Gordon added, “addressing these intoxicating hemp loopholes is absolutely necessary, and we applaud Governor Newsom for taking this important step forward.”

Somewhat similar discussions about how to regulate hemp derivatives are playing out at the federal level, as congressional lawmakers consider legislative provisions to impose a general ban on hemp-derived cannabinoids such as delta-8 THC.

Rep. Mary Miller’s (R-IL) amendment to the 2024 Farm Bill, for example, was approved by a House committee in May and would remove cannabinoids that are “synthesized or manufactured outside of the plant” from the federal definition of legal hemp. The change is backed by prohibitionists as well as some marijuana companies, who’ve described the restriction as a fix to a “loophole” that was created under the 2018 Farm Bill that federally legalized hemp and its derivatives.

Anti-drug groups, law enforcement and some health organizations have called on Congress to embrace the ban, arguing that “trying to regulate semi-synthetic cannabinoids will not work.”

In addition to Miller’s amendment in the 2025 Farm Bill, the House Appropriations Committee last month approved a separate spending bill that contains a similar provision to prohibit cannabinoid products such as delta-8 THC and CBD containing any “quantifiable” amount of THC.

Hemp-derived cannabinoids also came up in a recent federal appeals court decision in which judges ruled that cannabinoids derived from hemp, such as THC-O-acetate, indeed qualify as hemp and are legal under the 2018 Farm Bill. In making that ruling, the court rejected the Drug Enforcement Administration’s more restrictive interpretation of the law.

How to address hemp-derived cannabinoids has caused some fractures within the cannabis community, and in some cases marijuana businesses have found themselves on the same side as prohibitionists in pushing a derivatives ban.

In a letter to congressional leaders ahead of Miller’s amendment, the U.S. Cannabis Council (USCC) proposed specific language they wanted to see included that would place hemp-derived cannabinoids containing any amount of THC under the definition of federally illegal marijuana.

While they’ve focused on the need to address public safety concerns related to unregulated “intoxicating” cannabinoid products such as delta-8 THC, some hemp industry advocates say the effect of the proposed language could be a ban on virtually all non-intoxicating CBD products as well, as most on the market contain at least trace levels of THC, consistent with the Farm Bill definition of hemp that allows for up to 0.3 percent THC by dry weight.

Meanwhile, the legislation that advanced through the House Agriculture Committee in May also contains provisions that would reduce regulatory barriers for certain hemp farmers and scale-back a ban on industry participation by people with prior drug felony convictions.

Specifically, it would make it so the U.S. Department of Agriculture (USDA), states and tribal entities could choose to eliminate a policy that prevents people with felony drug convictions in the past 10 years from being licensed to produce industrial hemp.

However, advocates had hoped to see more expansive language, such as what was described in Senate Democrats’ recent summary of their forthcoming Farm Bill draft. Under that plan, there would be a mandate to eliminate the ban, rather than simply authorizing it, and it would cover all hemp producers, not just those growing it for non-extraction purposes.

The Senate Agriculture Committee has not yet released the draft text of their bill, so it remains to be seen if the summary description matches what will ultimately be released. Bipartisan House lawmakers filed standalone legislation last year that would broadly lift the felony ban for would-be hemp producers.

Lawmakers and stakeholders have also been eyeing a number of other proposals that could be incorporated into the Farm Bill—and which could come up as proposed amendments as the proposal moves through the legislative process—including measures to free up hemp businesses to legally market products like CBD as dietary supplements or in the food supply.

The hemp market started to rebound in 2023 after suffering significant losses the prior year, according to an annual industry report from the U.S. Department of Agriculture (USDA) that was released in April.

The data is the result of a survey that USDA mailed to thousands of hemp farmers across the U.S. in January. The first version of the department’s hemp report was released in early 2022, setting a “benchmark” to compare to as the industry matures.

Bipartisan lawmakers and industry stakeholders have sharply criticized FDA for declining to enact regulations for hemp-derived CBD, which they say is largely responsible for the economic stagnation.

To that end, FDA Commissioner Robert Califf testified before the House Oversight and Accountability Committee earlier this year, where he faced questions about the agency’s position that it needed additional congressional authorization to regulate the non-intoxicating cannabinoid.

USDA is also reportedly revoking hemp licenses for farmers who are simultaneously growing marijuana under state-approved programs, underscoring yet another policy conflict stemming from the ongoing federal prohibition of some forms of the cannabis plant.

For the time being, the hemp industry continues to face unique regulatory hurdles that stakeholders blame for the crop’s value plummeting in the short years since its legalization. Despite the economic conditions, however, a recent report found that the hemp market in 2022 was larger than all state marijuana markets, and it roughly equaled sales for craft beer nationally.

Meanwhile, internally at USDA, food safety workers are being encouraged to exercise caution and avoid cannabis products, including federally legal CBD, as the agency observes an “uptick” in positive THC tests amid “confusion” as more states enact legalization.

Colombia’s Diverse Environments Grow Marijuana With ‘Uncommon Terpenes’ That Can Have ‘Unique Therapeutic Benefits,’ Study Shows