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Breweries of hemp drinks fear changes in the law

The ban proposed by lawmakers is intended to put a stop to the Wild West of cannabis products, which includes counterfeit and mislabeled edible and e-cigarette products sold without age restrictions or regulations.

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Hemp beverage makers have just entered a new market and now fear that a proposal to ban intoxicating hemp products in Illinois could spell the end for their new business.

The ban proposed by lawmakers is intended to curb a Wild West of hemp products that includes counterfeit and mislabeled edibles and vapes sold without age restrictions or regulations. But manufacturers say lawmakers can save businesses and jobs by strictly regulating and taxing hemp instead.

“To ban and destroy this part of the industry without having a process to discuss what to do seems really excessive and unfair,” said Ed Marszewski, founder of Marz Community Brewing Co.

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Hemp beverages have been a lifeline for craft breweries over the past year or two, whose beer sales have declined since the COVID-19 pandemic.

In Minnesota, where hemp beverages are regulated and taxed, sales taxes exceed one million dollars per month.

Mars Brewpub in McKinley Park began producing hemp drinks like Power of Flower and Juniper Fizz in 2019. Some contain CBD, the non-intoxicating component of hemp, while others contain THC, the component in marijuana that gets consumers high.

Other breweries such as Hopewell Brewing in Logan Square, Noon Whistle Brewing in Lombard and Naperville, and Engrained Brewing in Springfield also produce hemp beverages.

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The Illinois Craft Brewers Guild has 300 member companies employing about 6,000 people, but reports the closure of about 40 breweries in the past two years.

“The fact that members have access to a new source of revenue is incredibly important,” said CEO Ray Stout. “This ban could pull the rug out from under us.”

The ban, originally proposed by state Sen. Kimberly Lightford, would impose a two-year moratorium on all intoxicating cannabis products, including those sold in vape shops and gas stations, until a committee can propose regulations. A newer version, inserted into an existing bill for quick approval, would allow the sale of products, but only by businesses licensed under the state's current cannabis law.

Hemp entrepreneurs say this would lead to widespread business closures and put many people out of work. Instead, they are calling for restricting the sale of products to adults 21 and older, mandating testing and labeling for potency and purity, and imposing a 10% wholesale tax and a 10% retail tax.

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State-licensed cannabis companies have lobbied for the legislation, saying it is unfair that they are subject to strict regulations while hemp companies go unchecked.

While marijuana remains illegal under federal law, federal lawmakers legalized hemp in 2018, defining it as cannabis or cannabinoids with less than 0.3% delta-9 THC. But processors have figured out how to extract intoxicating cannabinoids like delta-8 and delta-9 THC from hemp, sparking the current controversy.

To make matters worse, some licensed cannabis companies also produce products made from hemp.

Tiffany Ingram, executive director of the Cannabis Business Association of Illinois, which represents licensed marijuana businesses, called the hemp products “Frankenstein weed” that testing found sometimes contained contaminants or doses much higher or lower than stated.

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“That’s why Illinois must push for an end to these products,” she said.

While there are some players who don't follow the rules, hemp brewers like Marszewski say responsible companies use the same labs as cannabis companies to carefully test and label their products and deserve a chance to sell their non-alcoholic beverages.

Marszewski sees the ban as a money-making scheme by billion-dollar cannabis companies to eliminate their start-up competition.

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“The hemp industry allows people who don't have a lot of money to start a business, hire people and pay taxes,” he said. “These attacks are just a way for cannabis companies to maintain their monopoly.”

Anna Harden

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