Some brewers argue Iowa THC rules misinterpret new hemp law, could mean end of some drinks
Iowa's New Hemp Product Regulations Face Pushback from Brewers and Retailers.
Iowa's plan to enforce a new law regulating consumable hemp products has spurred pushback from brewers and retailers who say proposed rules could bar a wider range of drink products than the law intended.
The law, House File 2605, imposes potency limits and a minimum age of 21 to purchase the products. It was signed into law by Gov. Kim Reynolds May 17 despite her "concerns" about the bill, citing a need to "protect minors from dangerous and intoxicating products."
Under the law, a consumable hemp product can contain no more than 4 milligrams of tetrahydrocannabinol (THC) per serving, and no more than 10 mg per container. THC is a psychoactive ingredient that gives you the “high” feeling when consumed.
However, in proposed rules written by the Department of Health and Human Services, every "closed-container beverage" will be defined as one serving per container — meaning every beverage with a potency of more than 4 mg of total THC would be banned from sale.
"Any beverage with > 4 mg total THC will be prohibited and denied on a registrant's proposed product list," the department wrote in a memo outlining frequently asked questions and rules sent to interested parties on May 24 and obtained by the Register.
Iowa-based brewers argue that's not what the law intended, and they warned that the rules could mean major cuts to their products. One major manufacturer said if a resolution was not reached, it would consider legal action.
The Department of Health and Human Services did not respond to a request for comment about the memo and draft rules.
Breweries could see major cuts to THC drink lines under rules
Those proposed rules would result in significant cuts to the drink lineups of several Iowa-based brewers. Climbing Kites, the THC-infused drinks sold by Lua Brewing and Big Grove Brewery, would be "dramatically impacted" by the new rules, CEO Dave Moore wrote in an email to the Register.
"Only one of our products would be compliant, and we would lose products that account for about 80% of our sales," Moore wrote. "We would also have a very large inventory of finished goods and packaging materials that would no longer be usable. This ruling would have severe financial implications to our business."
Field Day Brewing Co. in North Liberty, which sells the Day Dreamer THC-infused drink, would see a similar hit to its inventory, director of operations Dan Caraher told the Register. And the company's previous plans to reduce higher-potency products to comply with the letter of the law could now also be prohibited.
"Once (the law) came out, we were going to reduce our 15 (mg drinks) down to 10," Caraher said. "And we ordered labels for all of that. And then … this proposal came out."
In a May 28 email to sales partners, Caraher said the company was seeing a "major influx of purchase orders" for higher-strength cans as consumers stock up ahead of July 1, when the law takes effect. And he wrote that the company was planning to convert one of its product lines to 4 mg permanently, if the new rules do hold.
"It's kind of going against the statute and singling out beverages, so to speak," Caraher said.
Climbing Kites CEO hopeful for resolution but doesn't rule out legal action
Breweries have been in contact with HHS since the release of the draft rules, but it remains to be seen whether changes are made.
Moore, of Climbing Kites, said he was optimistic that businesses and the state could reach a "sensible conclusion" on the rules, but he did not rule out a potential lawsuit.
"If we can’t find an amicable resolution that allows businesses to continue operating within the parameters set forth in the statute, we will take legal action as a last resort to protect our interests," Moore wrote. "Again, we believe that we can work this out with HHS and the state without going through a legal process."
