A provision in the bill that would end the government shutdown would also ban hemp-derived THC products, complicating Minnesota’s laws.

MINNEAPOLIS — THC selzers, the beverages that have grown in popularity as an alternative to alcohol over the last several years, may soon be made federally illegal.

A provision in the bill that would end the government shutdown effectively bans THC products derived from hemp. And that has craft breweries in Minnesota scrambling.

Supporters of the provision, including Minnesota Attorney General Keith Ellison, claim Congress never intended to legalize THC derived from hemp in the first place. But industry leaders say the products have been a lifeline for Minnesota breweries, many of which they believe will now go out of business.

For Kevin Hilliard, co-owner of Insight Brewing Company, Flavor Pixels isn’t just his top-seller. The ability to sell the THC seltzers kept the business afloat after the COVID-19 pandemic.

“In our world, about 62% of our revenue comes from hemp-based THC,” Hilliard said. “I think this was absolutely critical for Insight Brewing Company to survive. “

But craft breweries like his are at risk if Congress effectively makes hemp-based THC beverages a federally illegal product.

“My initial response was anxiety,” Hilliard said.

In 2018, when Congress passed the Farm Bill, it legalized hemp-derived products — allowing for the creation of seltzers like Flavor Pixels. 

But a letter signed by 38 attorneys general, including Minnesota’s Keith Ellison, asked Congress to close what they call a “loophole” that allowed for quote “Frankenstein THC products that get adults high and harm and even kill children.”

While those concerns stem from illicit gummies that appeal to kids, industry experts say the law change would also affect the THC beverage industry. Selzers usually come in cans with 5 mg or 10 mg of THC. But this new federal law would limit that amount to 0.4 mg. 

“You don’t feel anything at 0.4 milligrams, which is part of the reason they chose it,” said Bob Galligan of the Minnesota Craft Brewers Guild.

Galligan says the federal law would decimate the industry. He says breweries would no longer be allowed to sell their product out of state. All aspects of their production and distribution would have to occur in Minnesota. And they’ll have trouble finding banks willing to offer loans for a federally illegal product.

When asked if some of them would potentially go out of business, Galligan answered, “Absolutely.”

Over at Insight, Kevin is cautiously optimistic about the future because nearly all of his sales are currently in Minnesota, they handle their own distribution, and their product is fully produced in-state.

But he knows many other breweries are not so well-positioned for the changes ahead. 

On Monday, Republican Senator Rand Paul tried to stop the provision. Minnesota Democratic Senators Amy Klobuchar and Tina Smith voted with him. But the other side prevailed 76 to 24.

If the House passes it with the current language, the new law would go into effect in a year.Â