Legal Considerations for Hemp-Derived Beverages in a Rapidly Evolving Market

The swift growth of hemp-derived CBD and THC beverages has introduced a wave of innovation to the beverage industry, along with a fair amount of legal confusion. These products are showing up everywhere: on retail shelves, in tasting rooms and in the hands of curious consumers looking for functional alternatives to traditional alcohol or cannabis products. And yet, their legal status remains anything but straightforward. 

In a recent Sovos ShipCompliant webinar, Emily Harris Gant, principal at Foster Garvey and chair of its alcohol beverage and cannabis practices, provided an in-depth overview of the legal and regulatory landscape shaping the hemp-derived beverage category. Here are a few key takeaways. 

Federal legal framework for hemp-derived beverages 

The 2018 Farm Bill removed hemp from the definition of marijuana under federal law, as long as it contains no more than 0.3% delta-9 THC on a dry weight basis. But that change didn’t resolve all the regulatory challenges concerning hemp. In fact, it opened up a new layer of complexity, especially when it comes to beverages. 

Under the Federal Food, Drug, and Cosmetic Act, the FDA prohibits the interstate sale of beverages infused with hemp-derived ingredients, as it deems those products to be “adulterated.” This restriction does not apply to hemp-derived ingredients designed as Generally Recognized as Safe (GRAS), though. Hulled hemp seeds, hemp seed protein powder, and hemp seed oil are all on the GRAS list, meaning that hemp-infused beverages containing these ingredients may be sold in interstate commerce. Given that most hemp-infused beverages do not solely utilize products on the GRAS list, this leaves most of the CBD and delta-9 THC products on the market in questionable legal status, which could change if Congress and the FDA decide to act. 

For alcoholic hemp-infused beverages, the TTB requires formula approval, which includes lab analysis. However, that approval is only granted for products containing GRAS-listed hemp ingredients. Labeling is tightly controlled—terms like “hemp” are only allowed in a TTB-approved statement of composition (e.g., “ale brewed with hemp seeds”) and may not include any reference, implication or graphic related to marijuana or psychoactive effects. Products containing a controlled substance under federal law—including cannabis—are not eligible for formula or label approval, regardless of whether they’re sold interstate or intrastate. 

State-by-state rules: A patchwork of hemp beverage laws 

With limited federal oversight, states have stepped in to regulate hemp-derived beverages on their own terms, resulting in a legal patchwork that shifts dramatically from one jurisdiction to the next. 

As of February 14, 2025: 

• 24 states explicitly allow the sale of hemp-derived delta-9 THC beverages 

• 10 states impose restrictive potency limitations, such as 1mg THC per serving 

• 5 states have no clear rules on retail sales 

• 11 states prohibit the retail sale of these products entirely 

Some states, like Minnesota, have embraced hemp-derived THC beverages, allowing products that contain up to 10 mg of THC in a single container, provided they meet labeling, age restriction, and other requirements. Others, like California and Massachusetts, have moved in the opposite direction, prohibiting the sale of hemp-infused beverages with detectable THC content outside of the regulated cannabis industry, or banning them outright in retail and alcohol-licensed environments. 

Still more states fall somewhere in the middle, limiting THC content per serving or container, or requiring special registrations to sell or produce these products. The pace of change is rapid: already in 2025, Iowa, Kentucky and Maryland have enacted new legislation, each with its own set of rules around potency, labeling and age restrictions. 

The key takeaway is that there’s no such thing as a “national” compliance strategy for these products, absent Congressional action. Each state requires its own careful review and often its own licensing pathway. 

Licensing challenges for hemp beverage producers 

Licensing challenges are another major concern for operators entering the hemp beverage space. Those operating under TTB permits or state alcohol licenses may risk those licenses by producing hemp-derived beverages on the same premises. Producers need to consider: 

• Whether producing hemp beverages violates federal or state alcohol license restrictions 

• Whether a separate hemp processor license is required 

• Whether holding both a liquor and hemp (or cannabis) license on the same premises is allowed or prohibited in a given state 

In some jurisdictions, dual licensing is possible; in others, it’s expressly prohibited. These rules differ widely and are evolving quickly, making it essential to consult legal counsel before launching or expanding a hemp-infused beverage program. 

What’s next for hemp beverages? 

The hemp beverage space continues to evolve rapidly, but the regulatory frameworks guiding it remain unsettled. At the federal level, the 2018 Farm Bill, which governs hemp production and sales, is set to expire in September 2025 after multiple extensions. Several legislative proposals are already on the table: some aim to restrict ingestible hemp-derived products, while others would establish more comprehensive and uniform oversight. 

At the same time, state-level regulation is accelerating. More states are implementing rules around potency, packaging, age restrictions and labeling, creating a patchwork that can shift quickly and carry serious consequences for noncompliance. 

As highlighted in the webinar, beverage producers in this category face a complex and often contradictory legal landscape. Missteps in licensing, product formulation or marketing can lead to significant legal and financial consequences. 

For those looking to enter or expand in this space, caution and consultation are essential. Legal guidance, operational diligence and proactive regulatory awareness are critical to building a compliant and sustainable hemp beverage program. 

Access the full webinar recording here.