“I think we are going to see a large chunk of states start to really put this movement under a microscope—and hopefully take an optimistic approach in seeking ways to usher in and guide this industry rather than stymie.”
As the cannabis and hemp industries continue to evolve and operators face an increasing number of hurdles, Rhode Island lawmakers are taking a closer look at how hemp-derived products—particularly beverages—are regulated.
House Bill 6270 aims to establish clearer guidelines for the sale and distribution of these products in the Ocean State. Specifically, the measure would “prohibit the sale of beverages and drink mix powders containing hemp-derived delta-9 THC in RI, unless such products are authorized and regulated under the state’s cannabis laws, and maintains regulatory consistency within the state’s cannabis framework.”
With the national hemp beverage market seeing pushback but also gaining traction as an alcohol alternative, this legislation could have major implications for local businesses, consumers, and policymakers alike.
In this interview with Derek Gould, the CMO of the Pawtucket-based Monarch Emulsions helps
examine the bill and consider its potential impact. He’s seen this issue emerge from a number of angles as an operator of a company that works with partners nationwide on their emulsion tech for drinks, and with that experience Gould ponders what the future might hold for hemp-infused sips in Rhode Island and beyond.
What are the primary objectives of Rhode Island’s House Bill 6270 concerning hemp-derived delta-9 THC beverages, and how does it aim to regulate their sale within the state?
According to the most recent drafts of regulations, HB 6270 aims to prohibit the sale of beverages containing hemp-derived delta-9 THC … unless approved under the state’s existing cannabis regulatory framework.
What does this mean? It means that the bill aims to cease the sale of hemp D9 products (mainly beverages) at non adult-use/medical cannabis dispensaries within the state of Rhode Island. These brick and mortar shops mainly include liquor stores, convenience stores, etc.
The proposed bill does, however, not prohibit the sales of hemp D9 products at the aforementioned licensed adult-use/medical cannabis dispensaries throughout the Ocean State.
Considering the rapid growth of the hemp beverage market, projected to reach $117.05 billion globally by 2032, how might HB 6270 impact local businesses and entrepreneurs in Rhode Island’s beverage industry?
Unlike states such as Minnesota (the “Mecca” for hemp beverages) and Texas (which is close to banning hemp-derived products), Rhode Island’s hemp market is still rather in its infancy. And unlike the aforementioned states, hemp beverages are really only retailed in Rhode Island. Aside from Monarch Beverage, there aren’t many RI-based hemp processors, co-pack manufacturers, and in-state beverage brands.
The ramifications that HB 6270 could have on this new emerging market is simple—it’ll kill an emerging industry and the new small businesses it’ll bring before it even begins. If you look at other states neighboring RI, such as CT—which has instituted regulatory oversight on hemp beverages [ed. note: along with a brutal 3% THC cap on drinks]—not only are we seeing new beverage brands emerge, but also renowned craft beer and spirit brands beginning to roll out their own lines of hemp-infused products to support the current market demands.
Plain and simple: HB 6270 keeps anything related to hemp in control of the licensed adult-use/medical dispensaries. And while I’m all for licensed dispensaries being an additional outlet for hemp beverages there’s a few key points that I don’t think have been considered.
Accessibility: To the novice user or cannacurious, dispensaries can still be perceived as intimidating and confusing. Some people also aren’t geographically close to dispensaries, which causes inconveniences in access. I’ve spoken with several hemp beverage consumers (from various demographics) and 95% have said that they prefer to walk into a traditional brick and mortar (such as a liquor store) with which they’re familiar and is closer to home.
Storage … or lack thereof: I’ve personally built dispensaries in MA and RI. I can attest that none of these establishments have the footprint (vault space) to accommodate pallets on pallets of cans. Cans consume a lot of real estate. With a lack in licensed storage space, we run into the distribution conundrum. We saw this in Massachusetts with infused-beverages once adult-use commenced … with such few dispensaries throughout the state with such little vault space, there’s no way they can accommodate sales velocity. Now we’re looking at a ridiculous amount of daily delivery routes, which becomes a major burden and expense on the distribution companies. This then trickles down to the beverage brand, thus cutting into their margins.
How does HB 6270 align with or differ from hemp beverage regulations in other states, such as Alabama’s recent legislation limiting THC content in hemp products?
HB 6270 aligns pretty closely with other states’ regulations on hemp beverages. Like other states that are allowing hemp bev sales, HB 6270 would place limits on total amounts of hemp D9 per serving; require child resistant fixtures on cans/bottles; require resealable tops (similar to High Noons); and mandate accredited third-party lab testing on all products.
Where it differs from most, if not all, states, again, is permitting only licensed dispensaries as the exclusive point of sale for hemp bevs. Aside from the typical regulations most states implement, we’re also seeing some states adopting regs that are very unique. For example: Alabama is only allowing beverages to be distributed to retailers licensed through the Alabama Alcohol Beverage Control Board, which can sell products under regulated conditions. They also banned all direct-to-consumer purchasing. With this, Alabama residents can no longer order any hemp-infused products online. If they do, residents could face fines and possibly jail time.
In what ways are hemp-infused beverages influencing consumer choices, particularly among those seeking alternatives to traditional alcoholic drinks, and what implications does this have for the beverage market?
The numbers are in and the statistics don’t lie … Americans are drinking less alcohol … especially the younger generations. Since this overnight boom of hemp-infused beverages, we’ve seen more and more demographics turn to these “euphoric” and “mood enhancing” products as a supplement or replacement of alcohol. Now, with new studies emerging that show long-term alcohol consumption is linked to cancer-causing properties, there’s definitely clinical/medical reasoning for people to seek alternatives. The other “‘simpler’ fact for a rise in hemp-beverage consumption is that social drinkers want the ritual and the buzz … sans the added calories, bloat, and hangovers.
We believe that the shift we’re seeing in alcohol consumption is real and is already having a sizable impact on beer, wine, and spirits sales. While alcohol is still preferred among a wide margin of social consumers, I think more and more “drinkers” will start to explore or jump ship completely from booze—especially with the rise of functional and nootropic iterations of hemp bevs that can also help promote other forms of cognitive and physical wellness.
What are the potential public health considerations associated with the consumption of hemp-derived beverages, and how does HB 6270 address these concerns?
HB 6270 primary and key focuses (with which we agree) are child/minor safety, consumer education on mindful consumption, and requiring certificates of analysis (COAs) from accredited labs on all hemp-infused products.
These are all areas in which Rhode Island could look to other states as exemplary models. The one area I believe all states permitting hemp beverage sales could improve on is with consumer education. Very rarely—if ever—do you walk into a liquor store that sells hemp bevs and see a representative of either a beverage brand and/or its distributor doing a pop-up with educational materials, uninfused samples, and other activations to engage consumers from a knowledge-base standpoint. This is an area that needs to be shown more attention and addressed by all of the aforementioned parties
How might the enforcement of HB 6270 affect Rhode Island’s position in the evolving national landscape of hemp and cannabis-infused products, especially in terms of economic opportunities and public perception?
Given how HB 6270 rolls out, I believe that the regulatory body which gains oversight on hemp-infused beverages is going to be in a pivotal position to demonstrate how this industry can proliferate on a variety of levels. When looking at cannabis, we’ve seen so many markets fail … and fail fast. This is an opportunity to make a substantial impact and champion on how to navigate the peaks and valleys of this new and unknown territory. Whether it’s from a taxation standpoint, compliance with public health and safety, simulating our local economy with new business, or becoming a case study for success … there are going to be a lot of eyes and ears on the Ocean State in 2025.
What are your thoughts on the future of hemp-derived beverages both in Rhode Island and nationally, and how do you see this segment evolving over the next 5 to 10 years?
Personally, I think hemp is here to stay in Rhode Island. From a national standpoint, I think it’s really going to vary from state to state … but I believe we’ll see more states permit rather than prohibit. While some of the more recent turn of events of state-wide bans on the sale of hemp-infused products (California and Texas) might contradict my beliefs, I think we are going to see a large chunk of states start to really put this movement under a microscope—and hopefully take an optimistic approach in seeking ways to usher in and guide this industry rather than stymie.
When it all comes down to it and we’re talking about new and emerging markets, you have to look at everything from a business standpoint. What’s good for the goose is good for the gander. Hemp is federally legal and cannabis is not, no matter which way you spin the prism. With this rise in hemp-infused beverages here in the US, we’ve seen a true testament to the fact that not only are these drinks creating real competition for the regulated cannabis industry, but the alcohol and pharmaceutical industries, as well. The rapid growth and national footprint we’ve seen these beverage brands take on is almost unheard of.
With this massive market share, we will start to see a boom in mergers and acquisitions. Think about it, if big alcohol or big pharma continue to see a dramatic decline in their traditional sales due large in part to the presence of hemp-infused bevs, don’t you think it’d be in their best interest to implement the “if you can’t beat ‘em, buy ‘em” school of thought? It’s just like we saw years ago with the rise in craft breweries and how it disrupted traditional big alcohol beer brands. And, if big alcohol or big pharma are putting big bucks towards [Mergers and Acquisitions], you better believe they’ll have their top lobbyists working day and night to define state-specific and national regulatory frameworks … frameworks that best suit their interests and the interests of its stakeholders.
