HBA Fact Sheet: Lawful Hemp Protection Act
Reps. Andy Barr and Angie Craig today announced the Lawful Hemp Protection Act, a bill to regulate the hemp industry. Here are the highlights from that proposed legislation as it relates to hemp beverages (click here to download the full legislation).
Overview - The Lawful Hemp Protection Act creates a comprehensive federal framework for hemp-derived cannabinoid products with a dedicated regulatory, tax, and distribution structure for hemp beverages modeled on alcohol. Hemp beverages would be regulated as food by the FDA, taxed and permitted through the Treasury Department (via the Alcohol and Tobacco Tax and Trade Bureau (TTB)), and sold through a three-tier system that separates supplier, distributor and retailer.
Five milligrams of THC per serving - FDA must set maximum cannabinoid limits for all products within 12 months of enactment. If it misses that deadline, a statutory cap of five milligrams of THC per serving applies, until FDA sets a limit.
Three-tier distribution - Manufacturers sell only to wholesalers; wholesalers sell only to retailers; retailers only buy from wholesalers. No person may hold permits or any interest in more than one tier. This system replicates the existing three-tier system for the alcohol industry.
Federal excise tax - Beverage manufacturers pay a five percent tax on annual revenue. Beverages are taxed at a rate of five cents per milligram of THC.
3 milligrams of THC: 15 cents
5 milligrams of THC: 25 cents
10 milligrams of THC: 50 cents
For comparison, alcohol is taxed at the following rates:
1.5 ounces of liquor: 13 cents
12 ounces of beer: 5 cents
5 ounces of wine: 4 cents
Federal permits - Beverage manufacturers and wholesalers must hold Treasury permits, keep inventories and records, and are subject to inspection. Businesses operating at enactment may continue if they apply within 30 days after regulations take effect.
Alcohol-style trade practice rules - Tied-house arrangements, exclusive outlets, commercial bribery, and consignment sales are prohibited for beverage manufacturers and wholesalers. This mirrors the Federal Alcohol Administration Act.
Age-gating - Sale to, and possession or consumption by, anyone under 21 is a prohibited act under the FDCA.
Labeling and testing - Labels must state THC per serving and per package, carry a government warning, and link (QR code) to a certificate of analysis from an ISO/IEC 17025-accredited lab. Packaging that appeals to children is prohibited.
American-made requirement - Products must be made exclusively from hemp grown in the U.S. and processed, finished, packaged, and labeled in the U.S.
Interstate commerce protected - States may regulate as or more stringently than an alcohol-comparable scheme, but may not block compliant products from passing through their borders.
Impaired driving - States must treat hemp impairment like alcohol impairment (same field-sobriety standards and penalties) or lose 10% of federal highway funds starting FY2027; no per se blood-THC threshold is required. One percent of beverage tax revenue supports state enforcement.
State authority preserved - States, territories, and Tribes keep full authority to enact stricter rules; federal compliance is not a shield against state law.
Timing - FDA provisions apply to products entering commerce 180 days after enactment; Treasury must issue tax and distribution regulations within one year, with the permit and tax regime effective once those regulations are published.
Work-in-progress (WIP) hemp protected -A new “unfinished hemp-cannabinoid ingredient” category lets extracts, concentrates, and other intermediates exceed the 1% THC threshold during processing without losing hemp status.WIP material must stay with licensed operators, may only be sold or shipped to federally permitted manufacturers for further processing, and can never be offered for retail sale or consumer use.
Hemp redefined at 1% total THC - Raises the federal hemp threshold from 0.3% to 1% total THC (including THCA) on a dry-weight basis, and repeals the hemp restrictions in the FY2026 appropriations law (§ 781).
FDA framework for all products -Hemp-derived cannabinoid products are regulated as food, with a recognized hemp dietary supplement category, uniform manufacturing/testing rules, and adulteration standards (e.g., no harmful combinations with alcohol, caffeine, or melatonin). Default caps if FDA misses its deadline: 50 mg per serving for inhalables and topicals.
Synthetics excluded - Chemically synthesized or modified cannabinoids (HHC, THC-O-acetate, THCP, and similar) fall outside the definition of hemp.
Please note: This information is current as of July 22, 2026 and is provided by the Hemp Beverage Alliance for general informational purposes only. Laws and regulations change frequently, and this summary does not constitute legal advice or substitute for the advice of qualified counsel.
HBA applauds Reps. Angie Craig and Andy Barr for bipartisan Lawful Hemp Protection Act
DENVER - The Hemp Beverage Alliance, the trade association for the hemp beverage industry with 375 members in the U.S. and Canada, today applauded Representative Andy Barr (R-KY) and Representative Angie Craig (D-MN) for introducing the Lawful Hemp Protection Act, a bill to regulate hemp products at the federal level.
This legislation reflects the increasing consensus that a clear federal framework is needed to support a stable, transparent hemp beverage marketplace. With the November deadline approaching, the Lawful Hemp Protection Act will provide regulatory certainty and allow responsible operators across the supply chain to continue to grow and compete.
The legislation addresses several critical issues, including:
Establishing that hemp drinks can only be marketed and sold to adults aged 21 and over
Protecting public health through testing requirements
Empowering consumers by developing clear, strong labeling requirements
Leveraging the existing alcohol regulatory framework, commonly called the three-tier system
Creating parity with the alcohol industry by establishing a reasonable excise tax
HBA and other stakeholders worked with Representative Barr and Representative Craig’s office over several months to develop legislation that builds on the accountability standards that have long governed the alcohol marketplace.
“Representative Barr and Representative Craig’s bill is a smart, bipartisan, stakeholder-supported solution,” said Christopher Lackner, founder and president, Hemp Beverage Alliance. “On behalf of the country’s hemp beverage suppliers, distributors, retailers, and responsible adult consumers, we urge Congress to fast-track this legislation.”
The hemp beverage industry has been a boon to local economies throughout the country. Craft brewers, wine & spirits distributors, liquor retailers and others have embraced the new category as sales of their legacy products continue to decline. In addition, states with regulatory frameworks are gathering significant tax revenue for the public benefit.
HBA recently released an industry data report that showed 133% growth in the category. With a federal framework in place, that growth is expected to accelerate, creating more jobs, more opportunity, and more consumer choice.
The 2018 Agriculture Improvement Act (commonly known as the “Farm Bill”) helped create a thriving hemp beverage category that continues to grow at an astounding rate. Although 28 states currently regulate hemp beverages, Congress passed a law in November 2025 that would eliminate the entire hemp industry. The Lawful Hemp Protection Act would save the hemp industry from this potential ban.
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Three things you can do this week to protect the hemp beverage industry.
1. Schedule a meeting with your congressperson for the August recess.
Tell them why you want a meeting and who you want to bring. Try to bring 2-3 people from the district… co-workers, supply chain partners, even your favorite customers.
Calendars are filling up. Contact them today to get a meeting for early August.
Estimated time to complete: 10 minutes.
2. Post an update on #fda-and-congress Slack channel.
Tell us who you are scheduled to speak with and when.
Estimated time to complete: 1 minute.
3. Prepare for the meeting with HBA fact sheets.
Let us know if you need a fact sheet for your state.
Estimated time to complete: 5 minutes.
Hemp Beverage Alliance releases wholesale sales data for industry.
Source: The Future of Drinking Hemp Beverage Alliance Industry Report covering 2024 - 2025, Hemp Beverage Alliance, 2026.
(DENVER) – The Hemp Beverage Alliance, the trade association for the hemp beverage industry with more than 375 members in the U.S. and Canada, today announced the first independently verified wholesale sales dataset for the category.
The Future of Drinking: Hemp Beverage Marketplace 2024 - 2025 is built on real depletion data, gathered and anonymized by VIP from 26 participating brands across 2024 and 2025.
While the dataset represents a limited segment of the total hemp beverage marketplace, it is the first of its kind to incorporate actual depletion data. The data is robust enough to reflect trends and regulatory outcomes through the 2024 - 2025 time period it covers, providing national, regional, and state-level insights.
Key findings include:
The hemp beverage industry grew 133% year over year.
Total case equivalent (CE) volume rose from 692,435 in 2024 to 1,616,075 in 2025.
Lower dose products are gaining market share, with the 6–10mg THC segment overtaking the 10+ mg segment in 2025.
The category follows adult beverage seasonality. Monthly data shows summer peaks and year-end strength consistent with how beer and spirits move through the calendar.
"While the category is still young, we are seeing indications of category maturation," said Anna Edgren, director of operations, Hemp Beverage Alliance, and lead author of the report. "Hemp beverages are no longer a novelty. Consumers are incorporating them into the buying patterns they currently follow for alcohol."
The raw data compiles information from suppliers who maintain an active SRS environment at VIP and are members of the HBA. There was no minimum volume, revenue, or history requirement to contribute to this dataset.
The report is available at hempbeveragealliance.org/vip-data-report.
HEMP BEVERAGE ALLIANCE IN AUSTIN CHRONICLE
The Austin Chronicle visited day two of the Hemp Beverage Expo. Click here to read what they had to say about Women in Hemp, THC meets coffee, and more.
Corrine B. slings samples of hemp-infused beverages at the 2026 Hemp Beverage Expo in Austin.
HEMP BEVERAGES AND THE INEVITABLE SHIFT TO THREE-TIER.
Mary Clarke, far right, leads the discussion at the Hemp Beverage Expo in Austin, Texas. Panelists included Gary Schneidkraut – Founder & Principal, Beverage Alcohol Consultants (BAC); Jean-Michel (“JM”) Leroux - Global Director: Casa San Lucas, Cobblestone Brands; Chris Herron – Chief Executive Officer, Climbing Kites; and Adam Oliveri – Co-Founder & CEO, Craft Collective Homegrown.
As policymakers search for a regulatory path forward, many signs point to one outcome: folding hemp beverages into the alcohol industry’s three-tier system. For operators, that means new rules and new partners.
We were honored to have Mary Clarke moderate a panel on three-tier distribution at this year's Hemp Beverage Expo. We were even more excited when she agreed to write up this summary of the discussion.
The Inevitable Shift? Preparing for Hemp Beverage’s Three-Tier Future
As regulators evaluate a path forward for hemp beverages, many signs point toward integration into the traditional three-tier (3T) system. This panel focused on what that shift would mean in practice, and why brands should begin preparing now rather than reacting later.
The Shift to a Three-Tier Model
Panelists began with an overview of the 3T system, which separates suppliers, distributors, and retailers. While it offers structure and clear compliance pathways, it also introduces tradeoffs, including reduced flexibility, increased complexity, and tighter margins. For hemp beverage brands, many of which have relied on more direct routes to market, this would represent a significant operational shift.
Rethinking Distribution Strategy and Relationships
A central theme was that success in a 3T environment starts with choosing the right distribution partner—and not simply the largest one. Panelists encouraged brands to focus on alignment, portfolio fit, and the level of attention they will realistically receive.
Key considerations included distinguishing between an “offer” and a true opportunity, understanding the differences between beer versus wine and spirits distributors, and evaluating the tradeoffs between large, mid-size, and regional players. The group also noted that not every brand is ready for a traditional distributor relationship, and that incubation or logistics partners can serve as an important interim step. Across all stages, honesty about a brand’s capabilities and goals is critical when entering these relationships.
Making the Model Work
Securing distribution is only the beginning. Panelists emphasized that brands must actively drive demand and support their distributor to achieve meaningful growth. That includes thinking from the distributor’s perspective, demonstrating clear intent in positioning and strategy, and building collaborative, not adversarial, relationships. Brands that succeed are those that consistently engage, stand out within a crowded portfolio, and take ownership of their growth.
Planning for Contracts, Margins, and What’s Ahead
Operating within the 3T system also requires greater sophistication around contracts, pricing, and tax considerations. With distributors holding significant leverage, brands must carefully evaluate terms and understand the long-term impact on margins and flexibility.
The takeaway was consistent throughout the discussion: if the industry is moving in this direction, brands should act now. Building the right partnerships, refining go-to-market strategies, and understanding the realities of distribution will be essential - because waiting is not a strategy.
NEW CO-SPONSORS ADDED TO REP. BAIRD BILL TO DELAY HEMP BAN
HR 7024 picked up four new co-sponsors in May and June. Thank you Rep. Levin, Mike [D-CA-49], Rep. Mrvan, Frank J. [D-IN-1], Rep. McCollum, Betty [D-MN-4], and Rep. Grijalva, Adelita S. [D-AZ-7] for supporting this critical legislation. And thank you HBA members and other advocates who urged these Members of Congress to act.
HR 7024 provides a two-year extension to the deadline created in November 2025 government funding bill. The language is specific, simple, and consistent with a companion bill in the Senate.
Download HBA’s fact sheet on this bill and contact your Members of Congress today. Tell them to co-sponsor HR 7024 in the House and S 3686 in the Senate.
THREE THINGS YOU CAN DO THIS WEEK TO PROTECT THE HEMP BEVERAGE INDUSTRY.
1. Participate in the #SaveHempBevs campaign.
Engage your customers by including a campaign link in your next newsletter.
Encourage your employees and supply chain partners to get involved.
Use #savehempbevs in your social media posts.
Estimated time to complete: 45 minutes.
2. Contact your Attorney General via HBA’s action center.
Visit HBA’s Action Center and send your message.
Send to 3 friends or colleagues and ask them to complete.
Estimated time to complete: 2 minutes.
3. Amplify HBA’s comments to the Nebraska Department of Agriculture.
Read about the issue on the HBA website.
Send an email to the Department of Ag. in support of HBA’s comments.
Estimated time to complete: 4 minutes.
… AND THREE THINGS YOU
SHOULD KNOW
1. Rep. Andy Barr bill expected soon.
Rep. Andy Barr's Lawful Hemp Protection Act is the most developed federal alternative to the November ban.
It would cap finished products at 1% delta-9 THC and build a framework for hemp beverages under the Alcohol and Tobacco Tax and Trade Bureau (TTB).
2. Sen. Ron Wyden bill expected soon.
Sen. Wyden is expected to introduce a fresh Senate framework that builds on his 2025 Cannabinoid Safety and Regulation Act.
HBA continues to work with Sen. Wyden and other congressional allies on a Senate path forward.
Wyden has long been the Senate's leading hemp advocate; his CSRA caps hemp beverages at 10 mg per container.
3. The push to delay the ban continues to gather steam.
You can voice your support for the delay via HBA’s action center.
HEMP BEVERAGE ALLIANCE SUBMITS COMMENTS TO NEBRASKA DEPARTMENT OF AGRICULTURE
HBA today submitted comments to the Nebraska Department of Agriculture re: Proposed Title 19, Chapter 5 - Adulterated Food Product Regulations.
Click here to download the letter.
Hemp beverage supporters can amplify these comments by emailing the Dept. of Ag. directly.
WHITE HOUSE ISSUES STATEMENT OF ADMINISTRATION POLICY ON HEMP/HR 8646
From our good friends at Policy, Decoded:
The Office of Management and Budget issued a Statement of Administration Policy on H.R. 8646, the fiscal 2027 Agriculture bill, on June 4th, and the cannabis news sits one sentence deep in the budget language. The administration says it supports advancing the bill and welcomes the chance to work with Congress to, at a minimum, update the statutory definition of hemp-derived cannabinoid products so Americans keep access to appropriate full-spectrum CBD while preserving what it calls Congress's intent to restrict products that pose serious health risks. The word doing the work is full-spectrum. Full-spectrum CBD keeps the whole cannabinoid profile of the plant, which means it carries a real concentration of THC, unlike the THC-free broad-spectrum and isolate versions. So this is not the administration asking Congress to strip THC out of hemp. It is asking to preserve THC-containing, whole-plant products while aiming the restriction at the high-dose, intoxicant end of the market, which is a more accommodating position than the early doom read allowed.
Read the entire story here. Download the OMB statement here.