Federal hemp THC ban threatens $180M Minnesota market

Minnesota hemp businesses are slashing orders, laying off staff and emptying store shelves as a new federal ban on hemp-derived THC drinks and gummies looms over a local market worth about $180 million a year.^[1]

The nationwide ban, set to take effect Dec. 11, would outlaw the sale of intoxicating hemp-derived THC products even as Minnesota law still permits them, putting retailers, breweries and specialty shops in legal and financial limbo.^[1] Banks, insurance companies and payment processors such as Square have already backed away from THC and CBD transactions ahead of the rule change, forcing some Twin Cities businesses into cash-only operations or to adopt costly, specialized point-of-sale systems.^[1]

Minnesota lawmakers opened the door to hemp-derived THC in 2022, allowing low-dose edibles and beverages made from hemp so long as they stayed within a narrow potency range and under the federal 0.3 percent THC threshold that defines hemp. The change triggered a boom in bars, liquor stores and breweries adding THC seltzers, tonics and gummies alongside beer and wine, producing roughly $180 million in retail sales in 2025 as consumers embraced a legal alternative in a state that had only recently begun rolling out its broader recreational cannabis program. The rapid growth also blurred lines between hemp and marijuana markets, raising questions among federal regulators about interstate commerce, product safety and how intoxicating hemp products fit under the 2018 Farm Bill, which never explicitly anticipated a nationwide market in psychoactive hemp beverages.

The looming federal cutoff is already reshaping Minnesota's players in sharply different ways. MinnyGrown, an early hemp brand, has exited the hemp space entirely and shifted into the state's regulated cannabis market, betting that staying inside a controlled system will be safer than trying to ride out a federal crackdown.^[1] Total Wine stores have allowed their THC shelves to run bare rather than restock products that could become unsellable overnight, while regional chain Top Ten Liquors has gone the other direction, expanding its hemp-derived THC offerings in the short term to capture demand before Dec. 11.^[1]

Breweries that diversified into THC beverages say the uncertainty is already chilling what had become an important new revenue stream. Indeed Brewing, one of the Twin Cities operations that added hemp-derived THC drinks to its lineup, reports that sales are now shrinking as retailers hesitate to place orders and compliance hurdles mount with financial partners pulling back.^[1] Company leaders say they cannot responsibly plan for their business on the assumption that Congress might intervene at the last minute to undo the ban, underscoring how fragile the federally tolerated hemp market has become despite Minnesota's decision to keep the products legal under state law.

1. FOX 9