After months of closed-door lobbying from major alcohol groups, Congress approved a hemp-market ban tucked into the federal funding bill that ended the government shutdown. Minnesota producers warn the measure will shutter legal businesses, upend supply chains, and effectively reinstate federal prohibition. The ban is scheduled to take effect in November 2026.
Minnesota growers and manufacturers say the economic damage will arrive long before that date. Farmers typically purchase seed by March and plant in spring, meaning uncertainty now threatens the entire 2026 season. Processors and beverage makers say contracts, equipment investments, and retail relationships will begin collapsing as soon as distributors pull back.
“For the first time, we could reach markets that we’ve been locked out of for decades,” said fourth-generation farmer Angela Dawson, CEO of the 40 Acre Co-op. “Because, if you haven’t noticed, farmers aren’t really incentivized to grow food for people. We’re actually told that’s the quickest way to lose our shirts. Organic farmers, family farmers, are struggling to make ends meet.”
Dawson said Minnesota’s 2023 cannabis legalization law opened opportunities that helped keep her farm alive. “Hemp really changed the game for me in 2020. It 10x my farm revenue. It let me innovate. I created my own compliant strain,” she said.
Minnesota’s hemp beverage industry, deeply intertwined with craft breweries and liquor stores, is considered the most vulnerable. The federal ban targets hemp-derived gummies, candies, oils and THC-infused drinks that have become fixtures at breweries and liquor retailers statewide.
“It is also a criminal justice issue,” said Rep. Ilhan Omar, co-chair of the Congressional Cannabis Caucus. “Overnight, a legal, regulated product in Minnesota would be pushed back into the shadows. We will see confusion, selective enforcement, and the possibility that ordinary workers and small business owners could face criminal penalties for something that was legal yesterday, based on decades of failed drug policy.”
Sen. Mitch McConnell, who championed federal hemp legalization in 2018, argued the new provision “will keep these dangerous products out of the hands of children, while preserving the hemp industry for farmers.” He said he wants to “restore the original intent” of the Farm Bill before retiring.
The alcohol industry itself was split. The Distilled Spirits Council, Beer Institute and Wine Institute supported an immediate removal of hemp-derived THC from the market. But 54 beer, wine and spirits distributors across 26 states urged Congress not to ban the products, noting that as alcohol sales decline nationally, hemp beverages have created jobs and stabilized revenue.
Brewers say even the phase-out timeline will destabilize inventory and supply chains. Fulton Brewery owner Ryan Petz said distributors will pull out well before the ban takes effect. “I would say it’s about six months,” he said. “They’re going to stop buying it way before it goes illegal, because they don’t want to be stuck with a whole bunch of products that’s illegal to have.”
Petz said his customers embraced hemp beverages after sampling them in states that legalized cannabis more than a decade ago. “It’s kind of meeting our already existing consumer base,” he said.
Liquor retailers say the ban undercuts substantial investments made to comply with Minnesota’s hemp regulations. “Liquor stores are safe and trusted places for these products to remain,” said Surdyk’s Inc. owner Melissa Surdyk. “For generations we have operated under strict regulations, including rigorous ID verification, staff training and close attention to customer safety.”
Bellboy, a beverage distributor, spent more than $250,000 building its hemp division, which now accounts for roughly 16% of its business. “So far this year alone, we have given out over $65,000 in commission,” said CEO Keith Donnovan. “Bellboy represents approximately 12 hemp companies, and 10 of them are located here in Minnesota.”
Manufacturers say they may not survive. “The hemp ban would be absolutely detrimental to the business’s health… these machines that we bought to make this product cannot be returned,” said Kevin Hillard of Insight Brewing. “If we don’t sprint to the finish on this we are not going to make it.”
Workers say the hemp industry has provided stability as alcohol consumption declines. Only 54% of U.S. adults say they drink alcohol, the lowest level since 1939, according to a 2025 Gallup poll. Fulton employee Justin Janicikin said hemp beverages helped create consistent work. “Flexible schedule, friendly environment, good pay, great product, great spot,” he said. “The change of pace is always evolving. It keeps my life interesting.”
Omar criticized the process that produced the ban. “Oftentimes, when lobbyists are trying to get something through that is not popular with the American people, they will do it in the dark,” she said.
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