State regulators will continue issuing hemp business licenses after November 12, even as canceled co-packing contracts and distributor buyback demands squeeze Minnesota's THC beverage makers.
GREAT LAKES, July 30, 2026: Minnesota will keep issuing hemp business licenses after November 12, when a federal cap of 0.4 milligrams of total THC per container takes effect, Office of Cannabis Management Director Eric Taubel said in comments published Tuesday, because hemp remains legal under state law. The result would be a licensed state industry making products the federal government no longer classifies as hemp.
Operators that continue would have to bank with Minnesota banks and use specialized payment processing, Taubel said, and would put leases, mortgages, insurance and loans at risk by dealing in a federally illegal substance. Breweries and cideries would also risk the federal permits they hold with the Alcohol and Tobacco Tax and Trade Bureau. "The upshot for the local legal industry is that this means a lot of lawyers' hours getting billed as people try to unpack what this new definition means," Taubel told Mpls.St.Paul Magazine.
Contract manufacturing is the sharpest exposure. Surly Brewing spent $5 million converting its Brooklyn Center facility exclusively to THC production, adding a high-speed can filler, a pasteurizer and a testing lab, and co-packs California brand Uncle Arnie's among others. Founder Omar Ansari said Surly's co-packing revenue exceeds its own hemp beverage line by roughly 20 times, and that co-packing orders were canceled within days of the cap's passage last fall. Surly laid off a significant share of its staff earlier this year. Summit Brewing, Fulton Beer, Insight Brewing and Sociable Ciderwerks were also identified as co-packers for national brands.
Roughly half of Minnesota Craft Brewers Guild member breweries produce hemp-derived drinks, generally 10 to 20 percent of their revenue, guild head Bob Galligan said. Industry participants described distributors now requiring breweries to agree to buy product back if the cap takes effect, and retailer orders slowing or stopping. Ryan Kopperud, vice president of growth for Wild State Cider's Birdie line, which is in more than 1,000 retail locations nationally, said Minnesota producers face outsized exposure because so much of their revenue comes from interstate sales.
Smaller operators are being cut off first. Divya Maiya, who launched the Minneapolis brand Desi High in 2025, lost her first distributor when the cap was announced and is seeking out-of-state co-packing after her local co-packer signaled it may not renew its license.
Elsewhere in the region, Indiana will meet the November deadline without a state framework. Senate Bill 250, which would have created manufacturer, distributor, retail and carrier permits under the Alcohol and Tobacco Commission, passed the Senate 35-13 in January and cleared a House committee 8-5 in February, amended to align most of its effective dates with the federal change. Its House sponsor did not call it for a floor vote before the February 24 deadline. Some trackers still list a July 1 effective date drawn from the introduced version; neither version became law.
Ohio's market remains split. The July 13 preliminary injunction from U.S. District Judge Jeffrey Helmick shields only the ten companies that sued, leaving other businesses subject to Senate Bill 56's prohibition, and Attorney General Andy Wilson's motion to stay the order is undecided. Illinois is operating under Public Act 104-463, signed June 12, which restricts products above 0.4 milligrams of THC per container to buyers 21 and older while preserving hemp beverage sales at licensed bars and restaurants. In Wisconsin, Assembly Bill 306 awaits a floor vote after clearing committee, and Legislative Council analysis notes the state's intoxicating hemp provisions carry a trigger repeal set to fire when the federal change takes effect. Michigan continues to route intoxicating cannabinoid products through licensed cannabis retailers.
Two Minnesota deadlines fall this week. The Office of Cannabis Management's annual petition window, through which any person may ask the agency to approve new product categories or declare a cannabinoid nonintoxicating, closes at 4 p.m. Friday. On Saturday, under the 2026 cannabis omnibus, the bar on one owner holding both a cannabis and a hemp business license lifts, allowing hemp operators to take cannabis licenses without divesting.
Forma works embedded on hemp and THC beverage formulation and commercial scale-up, from compliant dosing and label claims through co-packer qualification. This wire is a byproduct of the same regulatory tracking that informs that work.
See Beverage Formulation →