The hemp-derived THC beverage industry in Kentucky recently dodged a serious threat. What initially began as a proposal to temporarily ban these popular products shifted into a regulation that capped the THC content at 5mg per serving.
The proposed ban arose from concerns about the proliferation of intoxicating THC beverages that legally fell through what some refer to as a “federal loophole.” Under the 2018 Farm Bill, hemp-derived THC products are permitted as long as they contain no more than 0.3% THC on a dry-weight basis.
However, this threshold indirectly allowed for the creation of intoxicating beverages due to the weight-per-volume calculations that can be exploited to produce drinks with psychoactive effects, which lawmakers in Kentucky compared to recreational cannabis.
Hemp-Derived THC in Kentucky’s Grey Area
Hemp-derived THC beverages have been thriving in Kentucky. While recreational marijuana remains illegal under state law, these beverages have provided a legal alternative under the Farm Bill. This “loophole” has allowed the sale of intoxicating hemp-derived products, creating a unique market in states like Kentucky where full cannabis legalization has not yet arrived.
Senator Julie Raque Adams, who initially supported a moratorium with Senate Bill 202, argued that Kentucky needed to address the disconnect. Despite legal status under federal regulations, the lack of state-enforced guidelines contributed to the unregulated spread of hemp-derived beverages, which lawmakers argued raised safety concerns.
Facing resistance from the hemp industry in Kentucky, Senator Adams adjusted her stance. The proposed amendment no longer sought to ban these products outright but instead introduced a THC cap of 5mg per beverage. This decision was necessary, according to Adams, to protect consumers while continuing to regulate a thriving market more meaningfully.
Kentucky Hemp Industry Speaks Against Memorandom
Businesses like Cornbread Hemp, one of the state’s leading hemp product manufacturers, were vocal about the struggles a moratorium would have posed. Cornbread Hemp’s co-founder, Jim Higdon, highlighted how a ban could have resulted in significant financial losses, given the investments already made in this emerging product category.
“We’ve invested over a million dollars in a product that we will not be able to sell if the moratorium goes into place,” Jim Higdon, co-founder of Cornbread Hemp, said last Wednesday via WDRB. “I understand there is a lot of ‘yes’ votes in this committee, my only ask is that we have time to amend the bill and set a THC cap instead of a moratorium.”
The adjustment also includes measures to classify hemp-derived THC beverages under the same regulatory frameworks as alcoholic beverages. The responsibility for oversight will now fall under Kentucky’s Alcoholic Beverage Control (ABC). Additionally, the University of Kentucky Cannabis Center has been tasked with studying hemp-derived THC products and their impact, with findings due by 2026.
Federal Farm Bill Loophole Fuels Growth
Despite federal prohibition on traditional cannabis products, the 2018 Farm Bill granted unprecedented opportunities for hemp-derived cannabinoids. The law was designed to legalize non-intoxicating hemp compounds like CBD, but it unintentionally paved the way for products containing hemp-derived delta-9 THC, delta-8 THC, and other intoxicating substances.
By combining innovative extraction techniques and the dry-weight THC threshold, producers across the country pushed boundaries to create a variety of hemp-derived intoxicating products. While this has led to huge markets in some states, others have moved to restrict or ban these substances entirely, citing risks to public health and competition with recreational cannabis industries.
Kentucky’s decision to regulate rather than ban such beverages reflects the state’s dual priorities of providing market opportunities for hemp farmers and entrepreneurs while looking at safety concerns for a rapidly growing consumer base.
The Future of Hemp Products in Kentucky
The 5mg THC cap per serving now provides clear guidelines for hemp-derived THC beverage manufacturers. Not only does this what lawmakers argued would protect consumers, but it also ensures businesses have a predictable framework to operate within. By integrating hemp beverages into the same regulatory category as alcoholic beverages, Kentucky lawmakers hope to lower the risks tied to public health while maintaining a level playing field among retailers.
However, questions remain about the future trajectory of these regulations. The decision to conduct further studies on these products signals potential adjustments. For now, the amendment secures the immediate survival of the hemp beverage market while adding the necessary regulations for safe consumption. Regulators have allowed retailers a grace period to sell off existing inventory that exceeds the THC limits without facing penalties.
Broader Implications Beyond Kentucky
Kentucky’s move is not occurring in isolation. Other states have similarly grappled with how to regulate hemp-derived THC products. Some states have taken more drastic measures, implementing outright bans, while others have allowed the products, seeing them as valuable revenue sources to restricted cannabis markets.
Industry leaders fear that continuous restrictions could stifle innovation and growth within the hemp sector. On the other hand, people who want tighter regulations argue that the lack of alignment of federal policies addressing hemp-derived THC forces states to create one-off policies with widely varying impacts.
What This Means for Consumers
For consumers, the new regulations bring added clarity to the market. Hemp-derived THC drinks are here to stay—for now—with clearly defined THC content limits and regulations similar to that of alcohol. This ensures products meet safety expectations while making it easier for informed consumers to enjoy these beverages responsibly. Kentucky’s progressive approach keeps hemp-derived THC beverages a popular choice in states without wider marijuana legalization.
While Kentucky has resolved this issue right now, the ongoing study by the University of Kentucky Cannabis Center may influence further changes as early as 2026. For now, the 5mg THC limit offers a middle ground that balances access and safety in a rapidly growing industry.
