New Kentucky limits on cannabis-infused drinks advance in state legislature

LOUISVILLE, Ky. (WDRB) -- A bill adding new limits on cannabis-infused beverages in Kentucky continues to move through the state legislature, clearing the House of Representatives Wednesday despite concerns from hemp industry officials.

Senate Bill 202 proposes key changes to the sales and potency of the drinks that have proliferated in recent years. Kentucky hasn't approved recreational marijuana, but the 2018 federal farm bill legalized hemp plants with low levels of THC — inadvertently kickstarting the "weed water" boom.

The Kentucky legislation caps the amount of intoxicating THC at 5 milligrams per 12-ounce cans. And while it allows retailers to continue to sell drinks with higher amounts until June 1, drink sales in bars and restaurants would be banned outright.

Cannabis drinks also would be treated like other alcoholic beverages under a distribution system that flows from the producer to a distributor and then a retailer. Sales would be allowed by licensed retailers only in "wet" counties, with the Kentucky Alcoholic Beverage Control Board in charge of enforcing licensing and distributing laws.

State Sen. Julie Raque Adams, R-Louisville, called the bill an attempt to put "common-sense parameters" on a fast-growing market.

"It's just a starting step," she testified during a meeting of the House licensing and occupations committee. "We will continue to make progress as we go along, and more people engage. But I think this is a good place to start."

The House passed the bill on a 77-17 vote, sending it back to the Senate to consider changes made Wednesday. If the two chambers agree, the measure goes to Gov. Andy Beshear for his action.

SB 202 has changed since it was introduced last week in a "shell bill" — a vehicle for legislation that hasn't yet been made public. Raque Adams removed an outright moratorium on the products and, in the latest version, allows some on-premise drink sales at fairs and festivals.

Hemp industry representatives urged legislators to oppose the bill, raising a number of concerns that include requiring retailers to get liquor licenses to sell the drinks — a move that could affect an estimated 1,300 stores in Kentucky, such as those specializing in hemp products.

"It was hastily written without consideration of the feedback of the hemp industry, the one stakeholder group that actually understands the vast complex nature of the situation," said Annie Rouse of CannaBuzz Bar and Dispensary in Lexington.

Rouse told lawmakers during the committee meeting that SB 202 creates an "excessive burden" on an industry that already follows state rules. "We don't need new regulations," she said. "We need better enforcement."

Also speaking against the bill was Nancy Roberts, who said her husband switched to cannabis drinks to treat symptoms of chronic Lyme disease after first using alcohol. Roberts said she's concerned how the measure limits THC in individual drinks.

"Because of my husband's issues, 5 milligrams is like water to him," she testified. "He literally needs 100 milligrams to even sleep, and he will not be able to drink this many 5 milligram beverages."

Speaking in committee, Rep. Al Gentry, D-Louisville, questioned an approach that largely equates cannabis-infused drinks to alcohol while limiting the amount of the intoxicants.

"If we're going to treat it like the alcohol industry, then why are we banning their intoxifying substances to most of their products, yet treating 5 milligrams and below like intoxicating substances? Does that make sense?" he said.

He also referenced a separate bill, House Bill 775, that levies excise and wholesale sales taxes on cannabis-infused drinks. "You're going to get treated and taxed like that — like bourbon — but you're only going to be able to sell Michelob Ultra."

Raque Adams defended her approach, saying there are "a lot" of drinks on store shelves that haven't been approved by the Kentucky Cabinet for Health and Family Services, which now has regulatory power.

"We have an enforcement issue on these products because they're selling unauthorized products," she said. "And I think ABC is the appropriate place to go, and I think that this is a good bill."

House Licensing and Occupations Chair Rep. Matthew Koch, R-Paris, who carried the bill on the House floor, said there has been "lax oversight" and more is needed to keep the beverages away from children.

He noted that producers would be able to ship directly to consumers — like the way distilled spirits producers can now.

"We were simply trying to put this on a level playing field with other intoxicating beverages," Koch said.

This story may be updated.

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