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Kentucky Senate Bill 202 Advances Hemp Beverage Regulations

Hemp-derived beverages on display in a Kentucky store

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News Summary

The Kentucky legislature has approved Senate Bill 202, introducing new regulations for hemp-derived beverages. Retailers must now obtain an Alcoholic Beverage Control license, impacting 1,300 of the 1,500 registered retailers without liquor licenses. The bill enforces a THC limit of 5 mg per 12-ounce serving and aims to regulate these products similarly to alcoholic beverages, responding to the growing demand but raising concerns about its impact on small businesses. Ongoing debates continue about the THC cap and the bill’s implications for the local market.

Frankfort, Kentucky – The Kentucky state legislature has moved forward with Senate Bill 202, which imposes new regulations on hemp-derived beverages, aiming to align this burgeoning market with the regulatory frameworks that govern alcoholic beverages. With over 1,500 registered retailers in the state selling hemp products, the implications of this legislation are expected to have significant effects on small businesses and consumer access.

Under the new regulations, retailers will be required to obtain an Alcoholic Beverage Control (ABC) license to sell hemp-derived beverages. Approximately 1,300 of these retailers currently do not hold liquor licenses, and this requirement could pose a considerable challenge to their business operations and revenue streams. In addition, the bill mandates a limit of 5 milligrams of THC per 12-ounce serving in hemp-derived beverages, further complicating the landscape for product offerings.

The legislation seeks to ensure that hemp beverages remain out of reach from children and that they are regulated similarly to alcoholic drinks. This approach is reflected in the statement made by Rep. Matthew Koch, who highlighted the necessity of the regulations in light of the growing popularity of hemp-derived products. Notably, low-THC products have been regulated since 2023 by the Kentucky Cabinet for Health and Family Services, signaling a shift toward more stringent oversight.

Despite support for the bill, critics including representatives from the hemp industry have raised concerns about the 5 mg THC cap. They argue that this restriction may lead consumers to seek out products from out-of-state suppliers, undermining local businesses. Moreover, an initial proposal to suspend the sale of hemp beverages until Summer 2026 was removed from discussions, leading to further debate among legislators.

The House passed Senate Bill 202 with a significant majority vote of 77 to 17, returning it to the Senate for final consideration. The legislation includes provisions for on-premise sales at fairs and festivals, allowing for some flexibility within the new regulatory framework. Further stipulations dictate that retailers may only sell these beverages in “wet” counties, which are jurisdictions that permit the sale of alcoholic beverages, all under the oversight of the Kentucky ABC.

Opposition to the bill also questions the rationale behind the THC limitations while equating cannabis-infused drinks with alcohol. Critics assert that the legislative process surrounding SB 202 was rushed and did not provide sufficient consideration for the feedback and perspectives of those within the hemp industry. They argue that these regulations could carry negative repercussions for economic growth and the viability of small businesses in Kentucky.

The shift in policy is driven by a market that has expanded rapidly since the 2018 federal farm bill, which inadvertently allowed for hemp-derived products to proliferate across the country. To further understand the implications of this new legislation, the University of Kentucky Cannabis Center has been tasked with researching the impact of cannabis-infused beverages on local communities.

In summary, as Kentucky prepares to implement Senate Bill 202, the legislation reflects an effort to regulate a growing market while also responding to increasing consumer demand for alternative beverage options. However, the ongoing debates regarding THC limits and the potential burdens on businesses signal that the development of this industry continues to evoke varied perspectives among stakeholders and legislators alike.