When I walked into Total Wine stores in Missouri this summer, I couldn’t possibly miss the display of THC-infused hemp-based beverages.
Total Wine, the country’s largest spirits retailer, set the tone for the alcohol industry in June when it began carrying the products in its seven Missouri stores.
“It was incredible for us,” said Joshua GrigaitisOwner of St. Louis-based Mighty Kind Co., which produces various types of hemp sparkling water. “When someone like Total Wine comes on board, it moves the discussion forward enormously.”
Hemp naturally has very little THC, the intoxicating component primarily associated with marijuana. But this potency can be increased with some Science.
Now, Mighty Kind and other similar low-THC products have quickly become new revenue streams for bars, liquor stores and retailers across the state. These drinks are allowed to be sold outside of licensed cannabis dispensaries in Missouri since the 2018 Farm Bill legalized hemp.
Grigaitis said that in some bars his products account for 40-50% of sales.
But all that could come to a halt after Governor Mike Parson signed an executive order on August 1 that bans intoxicating cannabis products and threatens penalties for selling those products to any establishment with a Missouri liquor license or that sells edibles. It also prohibits companies like Mighty Kind from producing hemp-based THC beverages in Missouri.
The order will take effect on September 1. Details of its enforcement will be set out in the emergency regulations, which are currently being drafted.
The cannabis industry has called the measure an “overreach,” but Parson said at a press conference earlier this month that his order is primarily aimed at companies that produce intoxicating cannabis products that children might mistake for candy.
Parson stood alongside Attorney General Andrew Bailey and other government officials at his press conference in the Capitol and showed a Lifesavers package that contained THC gummy bears.
“These companies and these people who are profiting off of this material to give it to our children need to stop,” Parson said. “And no excuses. If they’re going to do it, do it right… just like everyone else needs to do it.”
By “everyone else,” Parson meant dispensaries licensed to sell marijuana for recreational use by adults. Because hemp is not a controlled substance like marijuana, there are currently no federal or state standards regulating intoxicating hemp compounds, he said.
Parson did not address the fact that about 9,000 retailers across the state currently sell hemp-based beverages and foods, a figure provided by the Missouri Department of Health and Senior Services appreciated in a budget analysis in April.
“Simply issuing an executive order without first voting or passing legislation is a major blow,” Grigaitis said.
Steve Busch, owner of Krew Distributing, said everyone in the cannabis industry agrees that the culprits mentioned by Parson should be removed from the shelves.
But the governor’s failure to address the impact this would have on thousands of bars, liquor stores and grocery stores was “disingenuous” and “bordering on unethical,” said Busch, whose company distributes 11 different cannabis beverages in eastern Missouri.
“This order singled out all retailers with a liquor license and prohibited them from selling the products,” Busch said. “So that’s pretty much all of my customers who are currently selling.”
Since March, Busch has been leading an initiative with several lawmakers to regulate beverages and edibles, with the bill set to be introduced in December.
Over the past two years, the marijuana industry – a major political donor Parson and Bailey – has tried unsuccessfully to persuade lawmakers to Ban on THC derived from hemp Products directly.
Grigaitis does not believe the order will have the effect the governor hopes.
Under federal law, the governor cannot punish people for consuming these products, and Parson made that clear during his press conference. The order only punishes retailers authorized by the state to sell alcohol or food.
Licensed cannabis dispensaries also cannot sell these products because the hemp used to make them must be grown in Missouri and processed in licensed cultivation and production facilities – just like marijuana. Almost all of these products currently on the market are made from hemp grown in other states.
However, the order allows Missouri residents to purchase these products online from out-of-state companies.
“This literally takes everything out of the hands of the people we have appointed or licensed,” Grigaitis he said. “Why should we take it out of there and put it in the dark? That doesn’t make any sense.”
The answer
The hemp industry will respond on several fronts, Busch said. He will circulate the bill immediately in hopes of gaining support from lawmakers, he said.
Chuck Hatfield, a longtime Jefferson City attorney who has represented cannabis companies, said it was “very unusual” for the governor to do by decree what lawmakers have refused to do for the past two years.
“There will undoubtedly be lawsuits over this,” Hatfield said, “because it’s an aggressive regulatory strategy and a little unprecedented. There are plenty of lawyers who will explain to the industry that they can make legitimate legal arguments.”
Hatfield believes the matter will be resolved in court. But legal action will have to wait until the emergency regulations are passed, Hatfield said. Only then will the true impact of the law be seen.
The emergency rules would be in place before the Sept. 1 effective date, said Mike O’Connell, spokesman for the Missouri Division of Alcohol and Tobacco Control, the agency tasked with drafting the rules.
“Anything we do before we see those rules is pure speculation,” Hatfield said.
Grigaitis said that while the order shocked him, it did not overly worry him.
“I’m pretty good at thriving in chaos,” he said. “The very weekend we launched our first CBD sparkling water, the shutdown happened and the whole world stopped.”
Several of his products contain only CBD, a non-psychoactive component of the cannabis plant that is not banned by the regulation. So the regulation does not completely ban all of his “alcohol alternatives,” he said.
But he believes Missouri’s industry will receive nationwide support because other states do not want their governors to take similar action.
“Everyone in the industry believes it will be stopped,” he said. “The rest of the country doesn’t want to see this precedent set that could make things worse.”
Is it safe?
DHSS Director Paula Nicholson warned families during the Aug. 1 press conference that these hemp products on the shelves are not regulated by any state or federal agency, so there is no way to guarantee their safety, she said.
“We have seen the negative effects firsthand,” she said. “It is disturbing that children in Missouri and across the country have been hospitalized after taking these substances. This is unacceptable.”
Julie Weber, director of the Missouri Poison Center at SSM Health Cardinal Glennon Children’s Hospital, told The Independent last year that more poisoning cases had been reported involving edibles containing marijuana than hemp-derived compounds such as delta-8.
In 2022, there were 25 cases related to Delta-8 edible products for all ages, she said, compared with 125 cases related to regulated edible marijuana products only for children ages 5 and under.
However, Weber testified before a legislative committee in January that federal concerns about Delta-8 products were growing.
“The packaging is also a big problem,” Weber said at the time. “It’s attractive, has bright colors, imitates food and candy. There are also cartoon characters on it.”
Products that imitate branded products for children are strongly condemned by the cannabis industry, says Justin Journay, CEO of Indianapolis-based 3CHI, which sells its products in Missouri.
“Everyone hates these guys,” Journay said. “Nobody wants to see these guys in the store because we get confused with them as if we were the same.”
Busch, whose company has been a major distributor for Anheuser Busch and other beer brands for decades, said he thoroughly tests the products he distributes and ensures they have all undergone similar third-party testing as marijuana products.
And his customers – more than 200 liquor stores, bars and restaurants – treat these products the same as alcohol, creating incentives for their employees to adhere to an age restriction to prevent underage consumption, he said.
Brian Dix founded his own craft beer distribution company, Craft Republic, based in St. Louis, in 2017. He took the step into self-employment after working in the beer industry for over 20 years.
One of his fastest-growing products is Mighty Kind beverages – and they have been a major reason he has been able to grow his business, he said.
The governor’s order was shocking, he said
“It’s an immediate stop to a major revenue stream for our business,” Dix said. “More and more people are bringing that category. So yes, it’s a significant impact that makes me want to figure out what to do.”
Like Busch, Dix ensures that not only tests are carried out, but also the results easily accessible to consumers for the products it sells.
And like his colleagues, Dix is committed to better regulation in this area.
“The governor’s office has taken a very aggressive stance on this,” he said. “And I understand we want to protect the children, but is that really what he’s doing here? Let’s impose regulations. Let’s enforce all the testing requirements. Let’s allow the state to collect taxes and licensing fees and regulate it like alcohol.”
