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Mainstream Retailers and Distributors: Navigating the New Terrain of THC-Infused Beverages

Mainstream Retailers and Distributors: Navigating the New Terrain of THC-Infused Beverages

This post originally appeared on Ben's LinkedIn Newsletter, Infused Insights. You can read and leave comments here.


 

Oh, you thought I was done? Nope, just had to take a week off to handle the firehose of conversations inspired by the recent movement around the DEA Rescheduling and the Ag Committee's Farm Bill. What a time to be alive! Now back to your regularly scheduled programming.

As mainstream retailers and distributors explore the burgeoning market of THC beverages, it is crucial to approach this new category with a clear understanding of its complexities and challenges, both in product and politics. This article aims to provide foundational knowledge and practical advice to ensure a smooth integration into your product offerings. As alluded to in my note above, this is a rapidly and constantly evolving conversation, so I reserve the right to be out of date upon publishing, but will attempt to keep my guidance relevant independent of any new amendments to the Farm Bill.

First-off, hemp is cannabis, especially that of the THC variety

It is important to start with a fundamental clarification: hemp is cannabis. By legal definition, hemp refers to cannabis cultivars containing less than 0.3% delta-9 THC (D9) on a dry weight basis at the time of pre-harvest testing. Since the publishing of the last Farm Bill, any downstream derivative of that definition has largely been argued to be legal, though not without its fair share of dissenters, and thus our current state of affairs. While the nuances of the Farm Bill and subsequent regulations can be extensive, the key takeaway is that THC, whether derived from hemp or state-regulated cannabis, is chemically identical and an intoxicating substance that should be managed with the same rigor as alcoholic beverages.

Notably, within the broader hemp industry, there are other D9-like products such as D8, D10, HHC, THCP and others that may have varying effects. However, these are far less common in the infused beverage category, with most beverage companies primarily offering D9 THC products.

Understanding the regulatory landscape

Each state has its own set of rules and regulations—or lack thereof—governing the sale and distribution of cannabis and hemp products. These regulations can vary widely, and shift rapidly, making it essential for you to develop a robust compliance strategy and understanding of the trajectory of the sector. When introducing THC beverages to your inventory, ensure that your team is well-versed in the local politics surrounding the cannabis and hemp conversation. Although the two supply chains can create similar products, the laws may differ significantly from state to state. This knowledge is not only critical for legal compliance but also for the effective marketing and safe distribution of these items.

In many cases, such as in California where I am based, the convergence of the hemp and cannabis marketplaces is an ongoing discussion. Your voice is needed as we engage with regulators and industry organizations about the opportunities for THC beverages in mainstream markets. If you have any questions about how to get involved, please reach-out as many already have.

Diana Eberlein and the Cannabis Beverage Association, and Christopher Lackner and the Hemp Beverage Alliance are great places to start, and are preparing guidelines and educational materials to help train your staff and inform curious consumers. Ensuring a positive consumer experience with these new products will maximize customer satisfaction, repurchase rates, and, consequently, revenue.

Protecting your reputation

Shifting legislation and federal frameworks aside, entering the THC beverage market comes with significant responsibilities that counterbalance the clear opportunities. As retailers and distributors, you play a crucial role in shaping how these products are perceived and consumed. While much of the industry is moving toward self-regulation and promoting best practices—and the majority of products are produced in sophisticated cGMP facilities—the regulatory landscape still presents shortcomings. It is imperative for you to prioritize safety and quality by partnering with reputable manufacturers that adhere to stringent testing and quality control standards, including potency stability testing. Requesting proof of stability testing, Certificates of Analysis that show product quality, and chain of custody documentation demonstrating compliant and quality inputs is key. This commitment will protect your consumers and, by extension, your reputation.

As this category proliferates, both citizen journalists and perhaps payrolled ones have begun to scrutinize products more closely. Ensuring that only the best products reach consumers not only turns potential reports positive but also maximizes the opportunity for satisfied customers and repeat purchases.

Recommendations for a Smooth Path Forward

  • Educate Your Team: Invest in training for your staff to ensure they understand the specifics of THC products, focusing on legal compliance, curation practices, and consumer education.
  • Select Reputable Partners: Work with manufacturers that have established records of compliance and transparency. Require thorough documentation and third-party testing results for all products you distribute.
  • Stay Informed: The regulatory landscape for cannabis is continually evolving. Keeping abreast of changes and adapting your practices accordingly is vital for maintaining compliance and customer trust.
  • Engage with Regulators and/or Trade Associations: Maintain open lines of communication with local regulators and/or organizations like the CBA and HBA to ensure that your business can positively influence the ever-shifting landscape.

 

By approaching the THC beverage market with diligence and a commitment to quality and compliance, you can successfully navigate this complex landscape, not only capitalizing on the opportunities it presents but also protecting the future of this innovative category.

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