REGIONAL — A federal proposal that is part of the deal to end the government shutdown is raising alarms across Minnesota’s hemp industry, which says the measure would effectively wipe out the low-dose THC beverages and edibles that became legal in the state in 2022. The concern comes about two weeks after Minnesota Attorney General Keith Ellison joined a group of 39 state attorneys general calling for Congress to ban intoxicating hemp products nationwide.
Minnesota legalized hemp-derived THC edibles and beverages in 2022, allowing up to five milligrams of THC per serving and 50 milligrams per package. The move created a low-dose consumer market in the absence of a licensed recreational cannabis system. Sales took off quickly, led first by gummies and beverages sold in liquor stores, specialty shops, and some convenience retailers. As demand grew, breweries and small manufacturers began producing their own low-dose beverages.
For many Minnesota craft brewers, those beverages have become an important revenue stream at a time when traditional beer sales are declining.
“The beer business is way down,” said Surly Brewing founder Omar Ansari in an interview with MPR News. “A lot of breweries, this is what they do. This keeps the doors open.”
Ellison’s participation in the attorneys general letter last month drew attention within the industry, but he later clarified that his concern was not with Minnesota’s regulated low-dose market. The letter cited concerns about intoxicating hemp products manufactured and sold in ways that bypass state safety standards, particularly products shipped across state lines or sold in states without age limits or testing. In his clarification, Ellison said Minnesota already has guardrails in place and that his focus was on unregulated and higher-potency products entering from out of state.
“We do not want and do not support changing the status quo in Minnesota,” Ellison said on Oct. 30. “We are simply saying that competitors coming in with more potent products, which you’re not allowed to sell, should not be allowed to do that.”
Language in the new federal spending bill, however, goes further. The Senate bill, which passed Monday, would cap hemp-derived products at 0.4 milligrams of total THC per container, not 0.4 milligrams per serving, per entire can, bottle, bag, or package.
Most Minnesota hemp beverages contain 3 to 5 milligrams per can. Even full-spectrum CBD oils, including non-intoxicating varieties, contain trace THC above that threshold. Manufacturers say the federal limit would make nearly all legal hemp products in Minnesota illegal.
“It’s kind of like drinking an NA beer,” Ansari said. “There’s just nothing there.”
The Minnesota Craft Brewers Association estimates about 70 percent of the state’s 200 craft breweries are involved in the hemp beverage market. Many have purchased equipment, renovated space, and hired staff based on Minnesota’s regulatory framework.
Minnesota’s Office of Cannabis Management said it is reviewing the federal proposal and assessing its impact on state law. As of mid-afternoon Tuesday, Ellison had not issued another statement commenting on the bill’s potential impact, although he had previously expressed hope the legislation would carve out exceptions for states with regulated hemp industries.
National industry groups say the stakes are enormous. The U.S. Hemp Roundtable estimates the change could eliminate 95 percent of the hemp-derived products market, threatening more than 300,000 jobs and billions in tax revenue. The group said the industry is being used as “a pawn” in federal negotiations.
Some organizations in the regulated cannabis sector support the restriction, arguing the 2018 Farm Bill created a parallel intoxicating market without consistent oversight. Public health advocates have also raised concerns about access to some hemp products in states without clear rules.
The Senate bill now moves to the House, where members are considering even stricter hemp language.
Meanwhile, the spending deal removed a separate provision that would have allowed Veterans Administration doctors to recommend medical cannabis to patients in states where medical marijuana is legal. Without it, VA physicians will remain barred from offering those recommendations, and veterans seeking medical cannabis will continue to need to go through private clinicians.
If enacted as written, the hemp restriction would take effect after a one-year transition period. Minnesota businesses say that leaves little certainty for a market that has quickly become part of the state’s hospitality and small manufacturing economy.
“It feels like the rug just got pulled out from under us,” Ansari said.
But the industry’s challenges are not only coming from Washington. A separate fight is unfolding closer to home over whether Minnesotans can continue to order lower-potency edibles by mail. For many small retailers and rural consumers, that decision could matter just as much as any federal ruling.
A group of Minnesota hemp retailers has asked an administrative law judge to block the Office of Cannabis Management from enforcing what they say is an unadopted rule that would prohibit mail-order sales of lower-potency THC edibles. The businesses argue they have been shipping directly to consumers for more than three years under state law and that OCM’s recent guidance abruptly changes that practice without going through the formal rulemaking process.
If the state moves forward with enforcing the prohibition, the change could be felt in northern St. Louis County, where access to THC products varies widely from town to town. While a growing number of local shops now carry compliant gummies and beverages, many consumers in the North Country still choose mail-order for convenience, privacy, mobility limitations, or simply because the nearest retailer may be a long drive away. The petitioners contend that cutting off shipping will leave rural consumers more likely to seek products from unregulated out-of-state sellers.
The businesses also argue the move would harm small Minnesota manufacturers and retailers who have built their operations around direct-to-consumer sales. They say the prohibition would strand inventory, reduce revenue, and trigger layoffs, while out-of-state companies could continue to ship to Minnesota customers with little enforcement recourse. The administrative court will now decide whether OCM can enforce the restriction without first adopting it as a formal rule.
MPR News, 92.5 FM and 89.5 FM, contributed to this report.