Proposed legislation would force retailers in Georgia to pull THC-infused products from their shelves, which could put them on precarious footing.
“Stoners can be successful.”
That’s according to Joe Salome, who made the assertion while sitting in his Sandy Springs cannabis store stocked with shelves of gummies, tinctures and beverages.
The Woodstock native entered the cannabis business more than a decade ago, after witnessing the positive experience his mom had with hemp products as she fought and eventually won her battle with ovarian cancer.
Salome co-founded The Georgia Hemp Co. in 2017. His business sells a legal variety of lab-tested THC and CBD products online and in six retail outlets across metro Atlanta. At its peak, the company brought in $1 million in revenue every 50 days.
But a series of state regulations could upend his business and others like it. Georgia lawmakers are considering legislation that would limit the amount of THC in consumable hemp products and ban drinks that contain the substance.
Georgia lawmakers are passing legislation to strengthen THC regulations
Growing in popularity as an alcohol alternative, THC-infused drinks represent about 10-15% of Salome’s sales. The legislation would force him to stop selling the beverages and repackage other inventory, a costly endeavor that could leave his once-booming business on precarious footing.
The latest push for THC restrictions comes about a year after the General Assembly passed legislation that went into effect in October. Among other changes, the legislation banned cookies, chocolates and other baked goods containing the compound.
With fewer products to sell, Salome’s foot traffic and revenue is now half what it once was. He can no longer sell cannabis flower in his Georgia stores, instead shipping it to customers through an offshoot based in North Carolina, where it is legal.
Federal law allows the sale of products containing no more than 0.3% delta-9 THC by dry weight. A bill recently passed by the state Senate would apply that limit to products that contain delta-8 THC and other “intoxicating cannabinoids.”
Another bill passed by the state Senate would restrict the allowable amount of total THC in several products. State Senate Majority Whip Randy Robertson (R-Cataula) suddenly added the outright ban on THC drinks to the bill, which narrowly passed a floor vote.
State lawmakers may also increase the legal limit of THC levels in oils that are exclusively available to medical marijuana cardholders from 5% to 50% and allow them to be vaped.
The products sold by shops like Salome’s and convenience stores can be purchased by anyone over the age of 21.
All three bills would need to be passed by the state House and signed by Gov. Brian Kemp before becoming law.
Republican lawmakers say that the restrictions are needed to protect consumers, arguing that further research is needed on THC-infused drinks. Some Democrats are pushing back on the measures — especially the drink ban — due to the impact on businesses.
Consumers are turning toward THC and away from alcohol
There are approximately 4,100 hemp businesses registered in the state, according to Georgia’s Department of Agriculture. Six production companies are licensed to operate medical marijuana dispensaries in the state.
Many businesses have branched out into THC-infused drinks, as alcohol sales slow and some consumers embrace being “California sober” — partaking in THC while abstaining from other drugs and alcohol.
Angus Rittenburg, co-founder and CEO of award-winning THC beverage Wynk, which announced its expansion to Georgia via a partnership with United Distributors in November, believes responsible regulation, not prohibition, is the best path forward.
“Georgia’s proposed ban would eliminate consumer choice and threaten jobs in a growing industry,” Rittenburg said. “We urge lawmakers to consider regulatory frameworks that allow for responsible access rather than banning an entire category of products that many consumers use responsibly.”
United Distributors, the largest alcohol wholesaler in Georgia and Alabama, declined to comment on the proposed legislation.
Chris Herron, the co-founder and former CEO of Athens-based brewery Creature Comforts, announced last October that he would oversee the sales and marketing of Climbing Kites, a THC beverage brand, across the South.
Herron is monitoring the bill and working alongside industry peers and partners, as well as state lawmakers, to seek a “reasonable and responsible regulatory framework” for the drinks, he said.
Mehrnush Saadat, founder of Soberish, a non-alcoholic bottle shop and cannabis shop with Kirkwood and Serenbe locations, spoke with the Chronicle last year when the current hemp legislation went into effect. At the time, she predicted only 5-8% of her inventory would be impacted, but she was wary that the effects could be greater in the future.
If the newly proposed legislation becomes law, it would have a much larger impact on Soberish. Roughly 25-30% of its sales come from THC-infused drinks, and more than 40% of the store’s business would be impacted.
While last year’s legislation seemed to “center around the safety and safe consumption of THC products,” Saadat said, the bill seeking the outright ban on THC-infused drinks is “inappropriate and not in anyone’s best interests.”
The additional regulations could push consumers to purchase products, which might not be vetted, from other states through online orders, Saadat said.
“This ban on selling drinks would further hinder growth for small businesses and set us back from where other states are on this matter,” she said.
Salome was even more blunt in his assessment of the proposed legislation.
“What we’re doing is, we’re crushing our hemp industry,” he said.
H/T: www.bizjournals.com
