Last week, Wine & Spirits Wholesalers of America (WSWA) hosted a critical discussion on “Intoxicating Hemp: Regulation in the States and the Road Ahead” at Access LIVE 2025. This 30-minute session, held on the LIVE Stage in the Aurora Exhibit Hall, featured an engaging conversation between Jake Hegeman, Senior Vice President and General Counsel for WSWA, and Dr. Gillian Schauer, Executive Director of the Cannabis Regulators Association (CANNRA).
As intoxicating hemp-derived products gain momentum in the marketplace, uncertainty surrounding their regulation continues to grow. With limited federal oversight, states have adopted varied and sometimes conflicting approaches to managing these products. Hegeman and Schauer’s discussion provided valuable insights into the complexities of hemp regulation, emerging state policies and the challenges facing businesses and regulators alike.
As a disclaimer, Dr. Schauer made a point of mentioning that she does not represent any regulator or jurisdiction, and does not comment on the efficacy or practicality of specific state regulations.
Intoxicating Hemp: the Regulatory Divide
Dr. Schauer began by clarifying the legal and scientific distinctions between hemp and cannabis, which are both derived from the Cannabis sativa plant. Under the 2018 Farm Bill, hemp was defined as cannabis containing less than 0.3% Delta-9 THC on a dry weight basis. This threshold led to the explosion of hemp-derived cannabinoids, including Delta-8 THC, HHC, and THCA, many of which are now being used to create intoxicating hemp beverages and other products.
The regulation of these products has largely been left to individual states. While some states have embraced these products and implemented rules to govern their sale, others have moved to ban or restrict them, leading to a fragmented regulatory landscape.
Patchwork of State Regulations
Hegeman and Schauer explored how different states have tackled the issue of intoxicating hemp products. While some states have opted for outright bans, some have created hybrid regulatory models that incorporate hemp-derived cannabinoids into existing cannabis or alcohol control frameworks, and some have regulated them under a separate regulatory scheme.
One of the earliest and most significant examples of a state-led regulatory approach is Minnesota, which legalized and regulated intoxicating hemp products even before launching a recreational cannabis program. Minnesota’s regulations allow hemp-based THC beverages to be sold in any registered retail location, with state-mandated limits on dosage and serving sizes.
Other states, such as Connecticut and Iowa, have taken different approaches. Connecticut limits THC beverages to package stores and cannabis dispensaries, while Iowa requires strict product registration and age-gating for intoxicating hemp sales.
“What we’re seeing is a rapidly evolving regulatory framework, but there’s no single model that all states are following,” Schauer explained. “Some are opting for cannabis-style regulation, others are integrating these products into their liquor control systems or have departments of agriculture involved in regulation, and some are still debating approaches.”
This lack of consistency has created compliance headaches for regulators and businesses alike, as there is now a complex web of regulations both between, and often within states.
The Role of Legal Challenges
As states attempt to regulate intoxicating hemp, legal battles have emerged. The panelists noted that a number of states are currently facing lawsuits that are challenging the scope of state regulatory authority.
“The biggest legal arguments focus on federal preemption and commerce clause violations,” Schauer said. “Since the Farm Bill federally legalized hemp, some businesses argue that states cannot impose stricter regulations or outright bans. However, courts have been inconsistent in their rulings to date.”
Another challenge comes from the vagueness of state laws. In some cases, businesses have challenged hemp regulations on the grounds that the rules were too ambiguous or rushed through in hurriedly passed through emergency legislative processes.
Hegeman emphasized that, despite the legal uncertainty, many states will likely continue regulating hemp at the local level. “We’re seeing more litigation, but at the same time, states are adapting. They’re working to clarify their laws and strike a balance between public safety and market access.”
Regulating Hemp Like Alcohol?
One of the most key topics of discussion was whether intoxicating hemp beverages should be regulated under a framework similar to alcohol. Many industry leaders believe that adopting alcohol-style regulations — including labeling requirements, age verification and responsible distribution measures — could bring much-needed stability and consumer protection to the category.
Schauer acknowledged that some elements of alcohol regulation make sense for hemp beverages, particularly age restrictions, standardized serving sizes and clear labeling. However, she pointed out key differences.
“Unlike alcohol,” she said, “THC is fat-soluble rather than water-soluble, meaning it affects the body differently. There’s also no universal equivalency — one beer does not equal one THC beverage in terms of intoxication,” she explained. “Overconsumption looks different for THC than it does for alcohol, so we need regulations that take these differences into account.”
She also emphasized the importance of education, as many consumers still don’t fully understand the effects of THC beverages. “We need better labeling and communication to ensure people know what they’re consuming and how to use it responsibly.”
The Future of Federal Regulation: What’s Next?
Looking ahead, one of the biggest unanswered questions is whether Congress will update the Farm Bill — and in doing so, impose greater federal oversight on hemp-derived intoxicating products.
Hegeman posed the question: What happens if the Farm Bill’s current hemp definition is changed or repealed? Schauer responded that federal reform would likely cause growing pains but could ultimately create a more stable and predictable regulatory environment. “Right now, states are operating independently,” she said, “but if federal guidance becomes clearer, we may see more uniformity.”
While WSWA and other industry stakeholders continue advocating for clearer regulations, businesses operating in the space must remain vigilant and adaptable, ready to adjust strategies based on evolving laws.
Navigating a Shifting Landscape
As the session concluded, Hegeman and Schauer underscored the importance of collaboration between industry leaders, regulators, and policymakers. “The long-term success of this category depends on responsible regulation that balances consumer safety with market growth,” Hegeman emphasized.
Schauer encouraged businesses to engage with regulators, share best practices, and push for policies that provide long-term stability. “This is a moment for industry leaders to step up, establish best practices and demonstrate that this category can be both safe and commercially viable,” she said.
The discussion at Access LIVE 2025 provided valuable insights into the complex and rapidly evolving world of intoxicating hemp product regulation. As businesses and regulators work together to find common ground, the industry’s future will be shaped by ongoing policy developments, legal battles and the collective efforts of stakeholders committed to responsible growth.
For more updates on WSWA’s advocacy priorities, visit https://www.wswa.org/.