Minnesota Democrats in Congress look to reverse federal ban on hemp THC products

Minnesota’s Democrats in Congress say they will push to undo a federal ban on intoxicating hemp products before it takes effect in a year and upends the state’s market for low-dose THC products.

The federal ban on hemp products containing more than 0.4 milligrams of THC, the psychoactive ingredient in cannabis, was included in the bill to end the government shutdown that was signed into law earlier this month. Breweries and small businesses in Minnesota have said the prohibition will effectively kill the state’s hemp-derived THC industry if federal lawmakers don’t act.

Democratic U.S. Sens. Amy Klobuchar and Tina Smith as well as Rep. Ilhan Omar vowed to fight for a fix during a Monday news conference at the State Capitol. They noted that Minnesota has shown how to regulate this industry responsibly.

“Every day we fail to address this is another day of uncertainty in a very uncertain time in our economy,” Klobuchar said of the federal ban. “I want our state’s small businesses and farmers to know that we have their back.”

Added Smith: “Implementation of this law doesn’t start for one year, so that means that we have time. We have to use that time wisely and aggressively to fix this.”

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Hemp-derived THC products have been legal and regulated in Minnesota since 2022. Edibles may contain up to 5 milligrams of THC per serving under the state’s law, while beverages may hold up to 10 milligrams.

Businesses that sell federally illegal substances aren’t allowed to write off their operating expenses, resulting in a potentially huge tax bill that makes it hard to turn a profit. They also face issues with banking, credit card processing and insurance, among other things.

The federal ban on intoxicating hemp will effectively treat the products the same as marijuana, creating a set of circumstances that will make the business unviable for most breweries, liquor stores and retailers.

“It makes banking absolutely more difficult for us. Insurance then becomes an uphill battle,” said Bob Galligan, director of government and industry relations for the Minnesota Craft Brewers Guild. “We have to hold tax and trade bureau licenses. They will not operate with a federally illicit business. So we no longer can make beer — we have to choose hemp or beer.”

Business owners and elected officials said Monday the federal ban could result in the elimination of at least 2,700 jobs in Minnesota.

“Experts say this provision could wipe out up to 90-95 percent of today’s hemp drinks, gummies and other consumables. This is unacceptable,” said Omar, who co-chairs the Congressional Cannabis Caucus.

Omar told the Minnesota Star Tribune she’s considering whether to seek legislation overturning the ban or a “carve-out” for states that already regulate the products, like Minnesota.

“I have been having conversations with colleagues from our delegation and others who have been supportive on this issue,” she said.

Craig, who serves as the ranking Democrat on the House Agriculture Committee, said in an interview that she thinks any fix will need to come through the legislative process. And she emphasized that Democrats will need bipartisan support.

Even if states with existing hemp laws were allowed to operate under their own rules, Craig said Minnesota businesses could still face logistical challenges if their products are classified as federally illegal.

“That’s why I think the best path forward is a legislative approach,” Craig said.

“Congress needs to fix this mess, and I am committed to working with my colleagues in the House to address it,” she said in a statement.

Klobuchar and Smith both sit on the U.S. Senate Agriculture Committee. Klobuchar, the ranking Democrat on the committee, said she and Smith are well-positioned to try to reverse the ban through the federal Farm Bill or other means.

It’s unclear if Minnesota’s four Republicans in Congress will work with their Democratic colleagues or other lawmakers on a possible fix.

Rep. Tom Emmer, the No. 3 Republican in the U.S. House, seemed open to working on a fix in a brief interview on Capitol Hill last week. He said a Republican in his caucus was working on “a way to make it more acceptable to not only the industry, but to people on both sides of that issue here in Congress.”

Omar said Monday that Emmer “understands just how much the industry is vital to the economy of Minnesota.”

GOP U.S. Reps. Brad Finstad and Michelle Fischbach declined to comment about where they stand on the intoxicating hemp ban when asked on Capitol Hill, directing questions to their press teams, which did not return requests for comment, either.

Rep. Pete Stauber’s office also could not be reached for comment.

Galligan said that Stauber, a former police officer, doesn’t necessarily support intoxicating hemp products. But Galligan said he met with Stauber recently and informed him of how many Minnesota breweries could close if the ban takes effect.

“His eyes opened,” Galligan said. “This is where we find common ground.”

Omar Ansari, founder of Surly Brewing, said the state’s legalization of hemp-derived THC products in 2022 “inadvertently saved much of the Minnesota craft beer industry.”

“It’s time for Minnesota politicians to take that baton and help the Minnesota model become the federal model,” Ansari said.

Kevin Hilliard, co-founder of Insight Brewing in Minneapolis, said time is of the essence. While the ban won’t take effect for about a year, Hilliard noted that hemp farmers will start planting around Mother’s Day.

“If a farmer has uncertainty, they’re not going to plant,” he said. “So when we look around and say, ‘Hey, we’ve got a year.’ I don’t want you to think that way. I want you to think we have a couple months.”

“If we don’t sprint to the finish on this, we are not going to make it.”