President Trump’s latest move targets cannabis-infused drink makers, shutting down a fast-growing competitor to the alcohol industry. The changes follow a congressional compromise that unlocked federal funding after weeks of political deadlock.

It came as part of the compromise between Republicans and Democrats in Congress to pass the bill that provided funds to allow the federal government in Washington to recommence paying its employees and to restore many benefits to US citizens.

They had been frozen for seven weeks as part of an inter-party standoff.

Legal clause targets THC-infused beverages

When he signed the bill last Thursday, Trump enacted a clause to stop the spread of the intoxicating cannabis-infused beverages sold in some states. They were widely seen as posing a threat to mainstream alcohol sales because of their comparative cheapness.

It was introduced by Senator Mitch McConnell of Kentucky to close the loophole that has allowed some intoxicants to be sold as “hemp”, which is legal under federal law.

Originally, McConnell promoted the legalisation of hemp in 2018 to support farmers in his home state, but has reportedly since become concerned about intoxicating products such as gummies being used by children.

New THC limits tighten federal rules

Hemp-derived cannabinoid products with THC content exceeding 0.3% will no longer be permitted for sale, nor any “final” hemp-based cannabinoid goods with more than 0.4mg of THC per container.

From next year, the “low-dose” THC-infused beverages will no longer be permitted as most contain at least 1 milligram of THC.

The fast-growing market faces major setback

Sales of “hemp” drinks have rapidly expanded in states such as Minnesota and Tennessee that permitted the drinks and Euromonitor had forecast that the market could be worth more than US$4 billion in 2028.

Constellation Brands, which has a stake in Canadian cannabis company Canopy Growth, had been eyeing the market with increasing interest and Reuters reports that Pernod Ricard had held exploratory discussions about taking a stake in a rival producer earlier this year. Those talks are said to have come to nothing.

Industry response and next steps

Following the enactment of the new law last week, some founders of THC-infused drinks such as Cann are exploring means of having the drinks legalised, co-founder Jake Bullock said in a statement.

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