REGULATORY CLARITY
Regulations are necessary and should be thoughtful, concise, and 
support consumer safety and industry growth.

LICENSURE AND CHAIN OF CUSTODY

  • Hemp specific licensure should be required for hemp ingredient providers, suppliers, distributors and retailers within the states in which they operate to ensure compliance with hemp laws, enable regulators to enforce laws, and ensure swift response to any health and safety concern or need to recall.

MANUFACTURING

  • Manufacturers of hemp ingredients and hemp beverages should be limited to state-licensed hemp manufacturers.  

  • States should have an application process for manufacturers, including inspection procedures, that ensure proper food safety protocols are followed by all hemp manufacturers. Applications should be timely reviewed and, where appropriate, approved. 

  • Licensed alcohol manufacturers (including breweries) should be allowed to produce hemp products.  

DISTRIBUTION

  • Active state-licensed alcohol distributors (and cannabis, if applicable by state) should be automatically granted hemp distributor licensure upon application, whereas others may apply for and obtain hemp distribution licenses upon review and timely approval by state.    

  • Self-distributors, to the extent permitted by state-law, should be subject to the same taxation, quality control, and chain of custody protocols as third-party distribution.

RETAIL SALES

  • Hemp beverage retail sales should be limited to state-licensed hemp retailers

  • Active state-licensed alcohol (and cannabis, if applicable by state) retailers should be automatically granted hemp retail licensure upon application, whereas others may apply for and obtain hemp retail licenses upon review and timely approval by state.

  • Taxation: Taxation systems must be put in place to gather sales and excise tax revenue from retail sales, supporting state regulatory and enforcement efforts around a new category.

DIRECT-TO-CONSUMER (DTC) SALES

  • Where permitted by state law, businesses engaging in online DTC sales should be subject to similar licensing requirements as physical retailers.

  • Age-gating: Age-gating systems consistent with analogous industry standards must be in place for suppliers to sell hemp beverages directly to consumers

  • Taxation: Taxation systems must be put in place to gather sales and excise tax revenue from DTC sales, supporting state regulatory and enforcement efforts around a new category.

TAXATION

  • States should realize new tax revenue streams from a new product category with significant volume potential.

  • A reasonable excise tax structure (e.g., 3-5% of retail sale price) is imperative to provide regulators with the resources needed to properly address the growth of a new category and industry, and enforce applicable laws.

FRANCHISE LAWS

  • The Alliance is aware that alcoholic beverage franchise laws tend to vary by state, and generally were implemented in states following decades of consideration and growth of a commercial alcohol marketplace without reference to hemp or THC products, markets, supply chains, or related factors.  

  • As such, franchise agreements should be at the contract level and not incorporated into state law; however, while the Alliance does not strictly oppose implementation of franchise related provisions into state hemp laws, any such laws should allow contracting parties to agree that the terms of their contract govern the relationship.