Major Alcohol Group Backs Bipartisan Hemp THC Legislation, Wants Tax Rate Revisited

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The nation’s largest trade group representing wine and spirits distributors has voiced its support behind proposed bipartisan legislation that would regulate hemp-derived THC beverages instead of allowing a sweeping federal ban to take effect later this year.

The Wine & Spirits Wholesalers of America on Wednesday endorsed the Lawful Hemp Protection Act, legislation introduced by Reps. Andy Barr (R-Ky.) and Angie Craig (D-Minn.) that would establish the first comprehensive federal regulatory framework for intoxicating hemp-derived products.

WSWA said the legislation appropriately recognizes hemp-derived beverages as a distinct category and applies many of the same regulatory principles that have governed beverage alcohol for decades.

“This legislation takes an important step by recognizing that hemp-derived beverages can be regulated using the principles of the three-tier system that has governed beverage alcohol safely and successfully for more than 90 years,” Dawson Hobbs, WSWA’s executive vice president of federal affairs, said in a statement published Wednesday.

WSWA said the proposal would move the hemp beverage industry away from regulatory uncertainty while preserving state authority and strengthening consumer protections.

Among the provisions WSWA highlighted are:

• A federally permitted three-tier distribution system requiring manufacturers to sell only to wholesalers, wholesalers only to retailers, and retailers only to consumers
• A nationwide 21-and-over purchase requirement
• Mandatory product testing by accredited laboratories
• Clear THC content disclosures and ingredient labeling
•  Packaging restrictions designed to reduce youth appeal
• Federal licensing, taxation and enforcement requirements

The organization also backed the bill’s provision establishing a default potency limit of 5 milligrams of total THC per serving for oral products, including beverages, if federal regulators fail to create their own standards within one year.

While praising the legislation, WSWA said it hopes Congress further refines several provisions before final passage.

Specifically, the organization called for clearer definitions of the enforcement responsibilities of the Food and Drug Administration, the Alcohol and Tobacco Tax and Trade Bureau and other federal agencies overseeing the new framework.

WSWA also said it supports the bill’s prohibition on tied-house and exclusive dealing arrangements and wants lawmakers to ensure federal potency standards are “clear, enforceable and appropriate” for beverage products.

The group also indicated that it expects additional discussion around the bill’s proposed federal excise tax of 5 cents per milligram of THC on hemp beverages to ensure parity with beverage alcohol.

“We don’t need to reinvent the wheel,” Hobbs said. “The beverage alcohol model has worked for more than 90 years. These beverages are intoxicating products and should be treated like beverage alcohol.”

The endorsement adds another major beverage industry voice to the growing coalition supporting the legislation, which has also been backed by organizations including the Hemp Beverage Alliance, Hemp Industry & Farmers of America, the Kentucky Hemp Association and the U.S. Hemp Roundtable.

The legislation faces a tight timeline. Without congressional action, federal restrictions approved last year are scheduled to take effect on Nov. 12, a move that many hemp beverage producers say would effectively eliminate much of today’s marketplace.

WSWA said it plans to continue working with lawmakers and federal regulators to refine the proposal into what it called a balanced and enforceable framework that protects consumers while preserving a legal market for compliant hemp-derived beverages.