Alcohol’s Civil War Over Hemp Beverages - Herbal Profiles #113

Wholesalers want regulation. Big trade groups want bans. The battle for THC beverages just went mainstream.

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Welcome Note

Welcome Back Gardeners to the 113th edition of Herbal Profiles!

Happy Friday yall!

This week, I have a new episode of the Free Spirits podcast, a fresh news roundup, and of course some of my musings on policy. On a side note, if you’re here and you enjoy this newsletter please do me a favor hop over to Youtube or Spotify and subscribe. It’s free, you won’t get anything extra in your inbox besides this weekly email, and it helps me grow. I would love to hit 1,000 subscribers on my Youtube channel and 200 subscribers on Spotify before the end of 2025. I would really appreciate the support, even if you don’t use Youtube!

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The Great Divide: Alcohol’s Civil War Over Hemp Beverages

If you’ve been in the beverage industry for a minute, you know the industry loves a good turf war. But what’s happening right now over THC drinks goes way beyond your typical scuffle. I think we are seeing a full-blown civil war playing out in real time on Capitol Hill.

For the first time in decades, the alcohol industry is publicly split down the middle. On one side: the wholesalers, the backbone of the three-tier system, who are urging Congress to regulate and tax hemp beverages like alcohol. On the other: the big trade groups and legacy suppliers, who are pushing for a ban, at least until federal rules are in place. The result? A high-stakes, high-drama policy fight that could decide the future of the entire category.

How Did We Get Here?

This has been a long time coming, I think we can all agree on that and have seen it coming. Alcohol sales are down, consumer preferences are shifting, and hemp/THC beverages are the fastest-growing segment in adult drinks. The numbers don’t lie, $3B+ in sales, hundreds (maybe thousands?) of brands, and a consumer base that’s not just “canna-curious” but actively trading their evening glass of wine or beer for a sessionable THC seltzer.

But as the market has grown, so has the scrutiny. The government shutdown and Farm Bill negotiations have turned what was once a niche regulatory debate into a national flashpoint. And when 39 state attorneys general signed a letter calling for a ban on “intoxicating hemp products,” the temperature in DC hot gotten hot.

The Split: Prohibitionists vs. Pragmatists

Here’s where it gets interesting. The big trade groups, American Distilled Spirits Alliance, Beer Institute, DISCUS, Wine America, and Wine Institute, are calling for a ban, citing public health, youth access, and the need for a “level playing field.” Their argument: “Even water is regulated by a federal agency, but these products are not.” They want a pause, a reset, and a chance to write the rules before the market gets any bigger.

But the wholesalers? They’re not having it. In a letter representing $13B in revenue and 20,000 jobs, they made it clear: prohibition didn’t work for alcohol, and it won’t work for hemp. “If prohibition is enacted, that demand will not disappear, it will simply move into unregulated channels, undermining both public health, safety and legitimate businesses.” Their message: let’s regulate, not eradicate.

The wholesalers are 100% right here. Prohibition does not work. Banning something outright NEVER is effective. But we all know they don’t care about ‘policy’ or ‘youth access,’ no, they care about controlling and making a profit. If they cared about the ‘kids’ they would probably come after their members for marketing at kids, but I digress. The wholesalers see hemp drinks as a lifeline in a declining alcohol market. The trade groups see a threat to the status quo. Both are fighting for survival, but only one is looking forward, and being an impediment to progress rarely puts you on the right side of history.

What’s Really at Stake

For those of us in the hemp beverage industry, this is existential. We’re talking about 330,000 jobs, billions in sales, and the right to innovate in a category that consumers are demanding. Yes we regulations/banning that would uproot lives, but it’s also the loss of a once-in-a-generation opportunity to build something new, something better.

And let’s not kid ourselves: if Congress caves to prohibitionist pressure, the market won’t disappear. It’ll just go underground, where bad actors thrive and consumers lose. We’ve seen this movie before, and it doesn’t end well.

Why Regulation Is the Only Path Forward

Here’s the trend that matters: consumers want these products, and they want them regulated, safe, and accessible. The data is clear, most hemp beverage drinkers are also alcohol consumers, and they’re not looking to get “wrecked.” They want sessionable, predictable, and social experiences. They want to know what’s in their drink, how it will make them feel, and that it’s been tested and labeled correctly.

The states are already leading the way, building frameworks that balance innovation with safety. The smart move for Congress is to follow that lead, not slam the door shut. Prohibition is a 20th-century solution to a 21st-century market.

What Happens Next?

As of this writing, the fight is in the hands of Congress. The conference committee will decide whether the ban language stays or goes. There’s talk of compromise, a study period, a phased approach, or letting states continue to lead. But make no mistake: the next few weeks will decide whether this industry gets a chance to grow up, or gets shoved back into the shadows.

Don’t Let Fear Win

If you’re reading this, you already know where I stand. I’m pro-regulation, pro-hemp beverage, and pro-consumer. I believe the future of adult drinks is about choice, transparency, and trust, not fear, misinformation, or protectionism.

The alcohol industry’s split is a sign of just how disruptive hemp beverages have become. It’s also a sign that the old playbook, ban first, ask questions later, just doesn’t work anymore. The only way forward is to regulate, educate, and innovate.

If you’re in this industry, now is the time to make your voice heard. Call your reps, share your story, and remind them: the status quo can’t last, and prohibition isn’t the answer. The future is already here. Let’s make sure it’s one we can all be proud of.

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