In June 2023, Colorado Governor Jared Polis signed SB 23-271 (codified in C.R.S. 25-5-427 and regulated by 6 CCR 1010-24), a landmark bill regulating intoxicating hemp products in the state. This legislation followed recommendations from the Intoxicating Hemp Task Force, which was established a year earlier under SB 22-205.
At a time when many states were taking a hands-off approach to hemp-derived cannabinoids, Colorado took a decisive step toward regulating a rapidly expanding and largely unregulated marketplace. A step that, if not taken, would have likely resulted in a complete prohibition of hemp products in the state– something the state’s marijuana lobby was strongly pushing for.
SB 23-271 introduces a framework that, among other things, distinguishes between:
- Non-intoxicating cannabinoids
- Potentially intoxicating cannabinoids
- Intoxicating cannabinoids
The bill also imposes milligram limits on THC content – ranging from 1.25mg to 1.75mg per serving, depending on age and packaging size, and CBD:THC ratio requirements between 15:1 and 20:1. These limits conflicted with the industry norm of 2.5mg, 5mg, and 10mg product formulations, creating confusion and logistical challenges for manufacturers.
Industry friction and compliance challenges
Adjusting product formulations and packaging can be costly, particularly for small and mid-sized companies. As a result, many hemp businesses in Colorado have continued selling products that exceed the legal THC thresholds, gambling on limited enforcement. But unlike other states, Colorado has seen some enforcement. While odds of getting caught are still low, the consequences can be severe.
Violators face civil penalties of up to $10,000 per day, per product, and per violation. For example, a company manufacturing and selling five non-compliant products could theoretically face over $36 million in annual fines.
Real-world enforcement
The Colorado Attorney General’s Office is taking some action against noncompliant operators.
In 2024, the Colorado Attorney General filed suit against a Greeley-based hemp company and its owner, alleging that they sold products containing up to 35 times the legal THC limit. According to the complaint, the company’s products included intoxicating cannabinoids, such as THCA, Δ8 THC, and Δ9 THC, in concentrations exceeding the 0.3% THC and mg thresholds and violating the state’s required CBD:THC ratio.
The state further alleges that the company:
- Falsely advertised its products as “100% compliant with federal law”;
- Forged and altered certificates of analysis to misrepresent product potency;
- Made unapproved health claims about product benefits;
- Failed to implement adequate age restrictions, allowing minors to access intoxicating products; and
- Operated without the required licenses or permits.
This case remains ongoing. However, the AG is seeking penalties of up to $20,000 per violation, which, as discussed above, can be calculated per product, and per day. This means liability could easily reach millions of dollars if the allegations are proven.
Also in 2024, a Pueblo-based CBD company was fined $225,000, with penalties rising to $495,000 if violations continue.
The state alleged the company:
- Misled customers about product sourcing;
- Lacked proper licenses and documentation; and
- Failed to implement online age-gating for products containing Δ9 THC.
In May 2025, the AG’s office settled with two additional companies, imposing penalties ranging from $41,000 to $50,000, escalating to $141,000 – $250,000 upon future noncompliance. One company was accused of misrepresenting its products’ origins and health claims. The other allegedly allowed third-party use of its branding to market illegal hemp products.
A national trend may move toward enforcement
- Arizona has started enforcing intoxicating hemp laws, with penalties of up to $20,000 per product.
- THCA, once seen as a workaround due to its non-psychoactive raw form (it becomes psychoactive once it’s heated), is now widely included in 0.3% Total THC calculations, making it effectively illegal in most states.
- Δ8 THC and other synthetic or isomerized cannabinoids are being banned or restricted in most jurisdictions (just look at California and possibly Texas).
Final thoughts
For hemp product manufacturers and retailers, navigating this patchwork of state-by-state regulation has never been more complex – or more critical. Whether you’re producing consumable or topical hemp products, or selling on-line or in retail stores, your compliance strategy must account for every jurisdiction in which your products are manufacture, sold, or distributed.
If your company has received a warning or enforcement action – or you’re unsure if your products meet regulatory requirements in the states in which you operate, we can help. Proactive compliance is your best defense against costly litigation and enforcement.
