Delaware Bill Would Limit THC Beverage Sales To Liquor Stores, Closing Out Existing Hemp Retailers

*“This bill effectively shuts small [hemp] retailers out of a market they
helped create.”*

*By Briana Hill, Spotlight Delaware*

A rift has emerged between the alcohol industry and hemp store operators as
each lobbies lawmakers over a pair of state bills that they say could make
or break their businesses.

The proposed legislation, sponsored by Rep. Debra Heffernan (D-Bellefonte),
aims to bring order to Delaware’s current unregulated market of drinks and
edibles infused with tetrahydrocannabinol (THC), the compound that’s
responsible for the “high” in marijuana.

Originally introduced as one sweeping measure, the bill has now been split
into two: one regulating THC-infused beverages and a second that would
govern edibles such as gummies, smokable flower, tinctures and oils.

What was once only available on the illicit market two decades ago is now
increasingly a part of our daily lives—available in corner stores, liquor
stores and even on bar menus.

THC-infused products have become increasingly popular since the passage of
the 2018 U.S. Farm Bill, which created a loophole allowing for the legal
commercial and retail sale of hemp-derived substances.

Hemp is a non-intoxicating cannabis plant that contains 0.3 percent or less
THC by dry weight. But entrepreneurial hemp farmers have figured out a way
to chemically convert the non-intoxicating compound cannabidiol (CBD) from
hemp into intoxicating substances like delta-9 and delta-8 THC. It’s
technically legal as long as the hemp at time of harvest stays below legal
thresholds.

Aside from regulations around harvests and the complicated conversion
process, however, the end product is arguably indistinguishable from
marijuana-based THC.

Today, drinks and gummies with 5, 10 or 20 milligrams of hemp-derived THC
are commonly found in Delaware and across the country.

*Bill proposes new limits*

Heffernan’s beverage-focused bill would require all THC-infused drinks to
move through Delaware’s three-tier alcohol system. This means drinks must
be funneled through one of the state’s 22 licensed liquor distributors,
tested by either the state’s Public Health Lab or an authorized cannabis
testing facility and sold exclusively in liquor stores. It would also
prohibit bars, restaurants and microbreweries from serving infused drinks
for consumption on their premises.

The second half of the proposal, which would limit the sale of THC edibles
to licensed marijuana retailers, won’t be filed until next year.

Liquor store owners, for their part, have welcomed the bill, saying THC
drinks could help offset declining alcohol sales that have occurred in
recent years, with some estimating that the beverages could account for 20
percent of their revenue.

But many hemp and CBD store operators say that both the current and the
future bill would take all THC products off their shelves and force over a
dozen small businesses to close down.

“This bill effectively shuts small [hemp] retailers out of a market they
helped create,” said Amit Vyas, a local consultant for small hemp
businesses, during a May 13 House Economic Development/Banking/Insurance &
Commerce Committee hearing.

Heffernan’s beverage bill would also limit the amount of THC in drinks to
10 milligrams per container and would also force importers and
manufacturers to pay a 50-cent tax on each 12-ounce container that they
sell.

Despite the ongoing feud, Heffernan said the regulation is about consumer
safety, particularly concerns around underage sales and questionable
ingredients in untested products.

State officials began investigating Delaware’s unregulated hemp market last
year, as these types of products have been found in different convenience
stores, smoke shops, and gas stations throughout the state.

Last year, there were over 300 cannabis-related emergency room visits,
while this year there have been a total of 64, according to the Delaware
Division of Public Health.

The problem has also interfered with Delaware’s emerging adult recreational
marijuana industry, which has yet to launch. Many opponents of the industry
previously pointed to issues like odor and public smoking. However, former
Marijuana Commissioner Rob Coupe repeatedly noted that those concerns stem
from the currently illegal or unregulated market.

Delaware’s THC bills also come amid recent developments in hemp regulation
at the federal level. A provision in the recently proposed U.S. Agriculture
Appropriations bill would redefine hemp to ban products containing any
“quantifiable” amount of THC. If passed, the change could outlaw most
hemp-derived products, including non-intoxicating CBD, nationwide.

Heffernan’s THC beverage bill ultimately passed through the committee last
month, and she hopes to see the legislation on the House agenda this week.

She said that the first bill had more agreement on the path forward, so she
plans to continue discussions around other regulating consumable THC
products over the summer with the state’s new marijuana commissioner and
other stakeholders before introducing the next measure, which most likely
won’t hit Dover until next year, she said.

*Liquors seek to follow trend*

During the House Economic Development/Banking/Insurance & Commerce
committee last month, various liquor retailers, attorneys, hemp shop owners
and advocates expressed praise and concerns with the initial joint
legislation.

Co-founder of Universal Beverage Importers, Jason Giuliano, noted that
consumer behaviors are shifting away from alcohol and that THC-infused
beverages could make up a fifth of liquor store sales.

Another commenter, Bill Galbraith, owner of Wine and Spirits Co. of
Greenville and Tims Liquors in Hockessin, noted that he has seen a decline
in alcohol sales over the past two years and that he is currently seeking
ways to appeal more to his customers.

“THC-infused beverages offer a path to stabilize revenue and meet customers
where they are,” Galbraith said.

Various other representatives of the alcohol industry attended to voice
their support, including Paul Ruggiero, president of N.K.S. Distributors,
Delaware’s largest alcohol distributor.

But small business owners who sell CBD and hemp-derived products say the
bill unfairly pushes them out of a market that they helped to establish.

*Hemp stores could be killed*

One resident, Jesse Ginefra, owner of Botana Organics, has run his hemp
store in Wilmington since 2019.

Before that, he worked on a hemp farm in Colorado, but said he was inspired
to open his store to sell safe and clean products after coming to Delaware
and seeing that different gas stations and convenience stores were
marketing THC and CBD products.

His shelves are filled with different hemp-derived and CBD products that
tailor to the different needs of his clients, some of whom suffer from
PTSD, brain disorders, arthritis, anxiety and depression. More than half of
Ginefra’s customers are elders, many of whom visit his store regularly.

“I could always move to Pennsylvania for now, that’s right up the road. But
I’m honestly a little bit worried about some of our clients who are elderly
people, and they rely on taking hundreds of milligrams of CBD per day,” he
said.

Ginefra expressed frustration over the bill’s implications for hemp stores
that follow the rules, as he noted that his payment processor already
requires lab testing for all products and that he checks customers’ IDs as
part of standard practice.

Ginefra and other advocates in the hemp and cannabis industry, including
Zoë Patchell, president of the Delaware Cannabis Advocacy Network, say that
they’ve been in communication with lawmakers in hopes of finding common
ground on the upcoming legislation to regulate THC edibles and to ensure
hemp stores can remain open by being regulated under the state’s framework.

*This story was first published by Spotlight Delaware.*

FBI Grants Delaware Marijuana Officials A Fingerprint Service Code,
Allowing Launch Of Legal Market To Proceed

*Photo courtesy of Kimzy Nanney.*

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Closing Out Existing Hemp Retailers appeared first on Marijuana Moment.