Cannabis Group Series | Sip, Scale, and Stay Legal: The Hemp Beverage Playbook

As the hemp beverage industry continues to evolve, the first edition of the video series hosted by Clark Hill’s Cannabis Industry Group provides insights into the opportunities and challenges facing this rapidly growing sector. The impact of these industries has grown significantly, not only from a consumer standpoint but also from a business and regulatory perspective. This installment of the Clark Hill Cannabis Group Video Series was hosted by Craig Small, Vice-Chair of the Cannabis Industry Group, and featured a panel including Jamie Pearson of New Holland Group, Mary Bernuth of Pharos Premium Infused Beverages, and Alex Timbas, a Cannabis attorney at Clark Hill.

Introduction to Hemp Beverages

This edition of the series highlights the distinctive position of hemp beverages in the cannabis market. With products that can be manufactured in one state and shipped to another, hemp beverages offer a unique business model compared to traditional marijuana products, which must adhere to state-specific regulations.

The Appeal of Hemp Beverages

One of the primary attractions of hemp beverages is their legality and financial viability. Unlike marijuana products, hemp-derived beverages can benefit from traditional distribution models akin to those in the alcohol industry. There is a growing consumer base among Gen Z and Millennials who are looking for functional beverages that offer health benefits.

Overcoming Industry Challenges

Breaking into the hemp beverage market isn’t without its challenges. This is a capital-intensive industry where startups need significant upfront investments for production, distribution, and retail shelf placement. It is of the utmost importance to have a reliable network of distributors and robust plans for go-to-market strategies.

Legal and Compliance Considerations

The hemp industry has a complex regulatory landscape, which involves a patchwork of state laws governing product formulations, packaging, and sales. Legal compliance not only includes understanding state-specific rules but also keeping up with changes and ensuring that products meet all testing and labeling requirements.

Key Strategies for Success

To succeed in the hemp beverage arena, the panelists suggested several strategies:

• Diversifying State Presence: Starting with a smaller subset of states and gradually expanding to ensure compliance and manage costs effectively.
• Educating Stakeholders: With many retailers unfamiliar with hemp products, brands need to invest in educating distributors, retail staff, and consumers about their offerings.
• Advocacy and Industry Support: One of the pillars of success is industry participation and lobbying efforts to shape favorable regulations and foster responsible business practices.

Looking Forward

The future of hemp beverages is promising yet uncertain. As consumer preferences evolve and the regulatory environment continues to shift, businesses must remain adaptable and informed. The importance of collaborating with seasoned legal teams, like Clark Hill, and leveraging resources from groups like the Hemp Beverage Alliance cannot be overstated.

Conclusion

The hemp beverage industry stands at a crossroads with vast potential for growth but requires careful navigation of regulatory and market challenges. By fostering education, compliance, and strategic partnerships, companies can position themselves at the forefront of this dynamic sector. For businesses looking to make their mark, the journey demands resilience, innovation, and a commitment to excellence.

For further insights into hemp and cannabis-related discussions, Clark Hill will continue this video series, offering unique opinions for industry players from Clark Hill attorneys and other industry contributors.