Minnesota hemp THC drinks: Federal ban deadline set as Minneapolis brewery faces revenue loss

MINNEAPOLIS (FOX 9) - A Minneapolis brewery is grappling with how to handle a federal deadline that could wipe out a major slice of its business overnight.

The hemp industry now has more time before a federal ban takes effect, but uncertainty is already shaking up businesses that have come to rely on THC-infused drinks to stay afloat.

The stakes for local breweries

What we know:

Dan Justesen runs Utepils Brewing Co. in Minneapolis, a brewery that produces about 60 cans per minute and has expanded well beyond traditional beer. Utepils sells THC-infused sparkling water under its own brand, Bandwagon, and manufactures for other labels, including Stigma. 

By the numbers:

The brewery produces roughly 100,000 cans a month, and Justesen said those products now account for a significant portion of his business.

"It's 15 to 18% of our revenue," he said.

The backstory:

The 2018 Farm Bill legalized hemp to support farmers who use it to make rope and other products, but it created a loophole that also legalized THC drinks and edibles. Some in Congress want that loophole closed, and the ban is now set to take effect Dec. 11. President Trump signed a funding bill on Wednesday that delayed the ban by a month.

What they're saying:

With the deadline quickly approaching, Justesen said the uncertainty is creating a ripple effect across the entire supply chain.

"It's, right now, the proverbial hot potato. Who wants to get stuck with inventory when the rules end?" he said. "The retailers don't necessarily want it, warehouse people don't want it, we don't necessarily want it."

He added that the broader industry is in a holding pattern.

"Everybody is trying to eliminate risk because they just don't know what's coming," said Justesen.

What the ban means for Minnesota

THC drinks remain legal in Minnesota, but Utepils holds a federal permit to operate as a brewery, and Justesen is not sure what that will mean if hemp beverages once again become federally illegal. Utepils also manufactures for other brands, which sell their products in other states, something that would be illegal once the ban takes effect.

What we don't know:

Federal regulators have not signaled how they plan to enforce the ban against breweries that hold federal permits and have been producing THC beverages.

"They have never said a word to any of us for the last three years about producing this product in our breweries. Will they?" said Justesen.