New Federal Law Threatens Minnesota THC Market This December

Minnesota’s hemp industry expects major changes.

Starting December 11, new federal regulations will limit hemp-derived products to 0.4 milligrams of THC. Minnesota’s current market allows drinks and edibles with up to 10 milligrams of THC. Minnesota legalized hemp-derived THC products in 2022, which helped fuel a booming industry.

Businesses that have relied on THC sales are bracing for the impact. As reported by CBS News, businesses are scrambling to clear inventories or pivot their operational models.

The most immediate pressure is coming from financial intermediaries. At Northern Coffeeworks in south Minneapolis, the reality of the impending deadline arrived in the form of a digital notification. Barista Kara Bohlen explained that the shop’s point-of-sale provider, Square, recently informed them that it would no longer process transactions for THC products.

Minnesota businesses feeling affect ahead of federal THC ban

“Through Square, they immediately sent us a message and said that we need to pull all of our THC products,” Bohlen said.

A spokesperson for Square confirmed that the company began notifying sellers in August to ensure compliance with the upcoming federal restrictions. The result is a disappearance of these items from shelves and menus, with Northern Coffeeworks having moved many of its THC products out of public view, at least for now.

The stakes are particularly high for Minnesota’s brewery sector, which has pivoted more to THC beverages as consumers shift away from alcohol. That pivot is now under threat.

The reaction from these businesses has been a mix of discounting and operational changes. Back Channel Brewing has begun discounting THC beverages in an effort to sell existing inventory before the new restrictions take effect. Indeed Brewing has shifted hemp product sales to cash-only transactions.

The broader economic question remains: what happens to the profit margins of these establishments? “I think it will definitely hurt us a bit profit-wise,” Bohlen noted. “Like, OK, we’re not doing THC products anymore, so will we have to increase prices on things to make up for lost profit?”

The hemp law had been previously pushed off from November to December. Regardless of the intent, the outcome for Minnesota business owners is a forced retreat from a market they were told they could get into.

For now, the countdown to December 11 continues. For local shops and breweries, the industry has transformed into a race against the calendar.