Kentucky lawmakers advance ‘shell' bill to ban sale of hemp-derived beverages until next year
FRANKFORT — Kentucky lawmakers advanced a 'shell' bill Wednesday evening to ban the sale of hemp-derived beverages in the state until summer of 2026, a move supporters say will allow time to understand how intoxicating versions of the beverages are impacting consumers.
But those involved in the hemp industry decried the proposed moratorium on the sale of hemp-derived beverages as hampering, or even crippling, small businesses trying to market, distribute or sell the canned beverages that are gaining popularity across the country and popping up in places including convenience stores.
Senate Bill 202 sponsor Sen. Julie Raque Adams, R-Louisville, said the goal of her bill is to better understand and regulate intoxicating hemp-derived beverages similar to how the state regulates other intoxicating beverages such as beer or liquor.
She spoke to lawmakers alongside Rep. Matthew Koch, R- Paris, with a line of cans on a desk featuring various flavors and amounts of infused non-intoxicating cannabidiol, known as CBD, and cannabinoids, which can include intoxicating tetrahydrocannabinol, or THC.
'We are simply placing a moratorium on their sale until such time as we can establish robust regulations that protect Kentucky consumers and, most importantly, Kentucky children,' Adams said. 'We have a real, I think, consumer protection issue going on right now. We need to make sure that Kentucky gets this right.'
Legislative concerns about regulating hemp-derived beverages sprang into public view on the 22nd day of this year's 30-day session. The deadline for filing bills in the Senate was Feb. 18.
Senate Bill 202 originally made minor technical corrections in Kentucky law but was rewritten Wednesday through a substitute bill adopted by the Kentucky Senate's Licensing and Occupations Committee.
The practice of rewriting seemingly unimportant bills, known as 'shell bills,' with little notice in order to make significant changes to state law has been criticized by the Kentucky League of Women Voters, along with other legislative maneuvers that the League says exclude the public from participation in the legislative process. Lawmakers have argued 'shell' bills allow them more time to work on legislation and advance it beyond the deadline to file bills each legislative session.
Under SB 202, the ban on the sale of hemp-derived beverages would begin immediately upon the legislation becoming law and continue until July 1, 2026. The bill also directs the Cabinet for Health and Family Services to create regulations specifically for beverages containing non-intoxicating cannabidiol, known as CBD, and cannabinoids, which can include intoxicating THC.
Additionally, SB 202 would direct the University of Kentucky Cannabis Center to study the testing, manufacture, distribution, sales and effects on consumers of such beverages and present a report to the Legislative Research Commission by January 1, 2026.
Adams said given the 'chatter' the bill has created among the state's hemp industry, the version of SB 202 is likely just a 'starting place' with the end goal of finding appropriate regulations for a nascent industry. She said she ultimately wants to engage stakeholders on how it should be regulated.
SB 202 advanced from the Senate Licensing and Occupations Committee with seven Republicans voting in favor, two Republicans voting against and the two Democrats on the committee voting to pass on the legislation. Both Republicans and Democrats on the committee were concerned about the impacts a moratorium could have on businesses in the state, though some Republicans voted to advance the bill with the understanding it would be changed.
'By having a total prohibition in July of 2026, we're punishing the good players as well,' said Sen. Stephen Meredith, R-Leitchfield, who voted to advance the bill. 'It'll shut down their revenue stream and, probably, they won't exist.'
Various people representing the hemp products industry strongly opposed the current version of the legislation implementing a moratorium, though those who testified to lawmakers disagreed over how the beverages should be regulated — whether there should be a cap on the amount of milligrams of intoxicating THC in each beverage and what that cap should be.
Jim Higdon, the co-founder of the Kentucky company Cornbread Hemp which makes various hemp-derived balms, gummies and oils, told lawmakers the moratorium would put his growing company 'at risk' by undercutting a THC-infused beverage product launch the company has planned for April.
'I don't understand how a moratorium is different from a ban,' Hidgon said. 'If, as a small business, we are forced into a moratorium, it will kill our growth. And as a small business that's growing and being successful — successful in Kentucky — we would like to help the General Assembly to continue to grow and employ Kentuckians.'
Higdon said his company has spent a little more than $1.2 million to launch the planned beverage, featuring fruity flavors and about five milligrams of THC in each can. He told the Lantern that canceling the product launch would take a toll on his staffing, hemp farmers and more.
Sen. Jimmy Higdon, R-Lebanon, the father of the Cornbread Hemp co-founder, voted against the bill advancing out of committee. The Republican said the bill was detrimental to small business and that such beverages were already regulated by the state.
The rise of hemp-derived beverages and other products proliferating across Kentucky began with federal lawmakers legalizing the cultivation of hemp in the 2018 Farm Bill. That federal legislation also removed the prohibition of the production of intoxicating Delta-8 THC, a hemp-derived version of the THC found in marijuana that can give a user a similar 'high.'
But the legality of hemp-derived Delta-8 THC products in Kentucky wasn't immediate, and the initial focus of Kentucky hemp production honed in on the extraction of non-intoxicating CBD products.
The Kentucky Hemp Association sued the state in 2021 after a series of police raids of Delta-8 THC products, arguing Delta-8 THC was made legal under a past federal farm bill. A Boone County Circuit Court judge sided with the association in 2022 to legalize the products in the state.
In 2023, Kentucky lawmakers passed a bill into law directing the Cabinet for Health and Family Services to regulate Delta-8 THC products. The cabinet subsequently created a series of regulations overseeing the sale of such products including restricting sales to people 21 years old or older.
The creation of intoxicating hemp-derived beverages with Delta-8 THC have followed since with state legislatures taking a harder look at the regulation of such beverages.
Higdon, the hemp products company co-founder, told lawmakers he'd prefer SB 202 to be amended to have a cap on the amount of milligrams of THC in each beverage. But Dee Taylor, the president of the Kentucky Hemp Association and an owner of a Louisville hemp business, cautioned against having such a cap.
Taylor said her husband deals with seizures and needs a higher amount of THC in such beverages, and anecdotally she's had alcoholics come into her business who use the beverages instead of drinking alcohol.
Hidgon said the hemp industry includes people from various backgrounds, describing the industry as 'an island of misfit toys.' Because of that it's 'difficult to find consensus' on how to regulate the beverages.
The thing industry stakeholders agree on: a moratorium isn't the way forward.
'States are robustly regulating this sector, and lots of states are coming up with lots of different answers,' Hidgon said. 'A moratorium is prohibition.'
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