THC drinks disappearing from Illinois liquor stores Nov. 12

Why it matters: THC drinks have emerged as an alternative to alcohol, finding their way into liquor stores, bars and grocery stores. But the new law is poised to disrupt the growing beverage industry.

How it works: Under the new Illinois Hemp Act, products containing more than 0.4 milligrams of total THC per container will be classified as cannabis and can only be sold by licensed cannabis dispensaries.

• To put that in perspective, a 5-milligram THC drink contains 12.5 times the amount allowed under the new limit, while a 10-milligram drink contains 25 times as much.

State of play: Binny's Beverage Depot and other liquor stores are already clearing out their THC beverages ahead of the deadline.

• Retailers have until Nov. 11 to sell or otherwise dispose of affected inventory before the new restrictions take effect.

Context: The legislation, signed by Gov. JB Pritzker in June, was designed to bring oversight to intoxicating hemp products sold outside Illinois' regulated cannabis market.

• Supporters argued that the products were inadequately regulated, sometimes packaged to appeal to children and sold without the safeguards required of licensed cannabis businesses.

The big picture: Illinois is moving ahead even though the federal government has delayed its own deadline until Dec. 11.

Yes, but: The restrictions also affect low-dose THC beverages that have become increasingly mainstream.

What they're saying: "THC beverages are emerging as a fourth adult beverage category, alongside beer, wine and spirits," Ben Kovler, chairman of Chicago-based RYTHM Inc., said in a statement.

• Kovler said the industry's future depends on a regulatory framework that protects consumers while allowing businesses to operate.
• RYTHM's Señorita THC drinks have appeared on menus at Navy Pier, the United Center and music venues like the Vic Theatre over the past year.

Reality check: Entrepreneurs knew there were risks in building businesses around hemp-derived THC products, which flourished after the 2018 federal Farm Bill.

• "Consumers once again are ahead of lawmakers and regulators and the industry at large on this issue," Brad Spirrison of cannabis industry publication Grown In tells Axios.
• Spirrison says low-dose THC drinks appeal to consumers who might otherwise be uncomfortable with cannabis. Beverage makers worry that limiting sales to dispensaries could discourage those customers.

Zoom in: The restrictions are forcing Illinois THC beverage makers to rethink their businesses, from reformulating drinks to reconsidering where they can sell them.

• Chicago-based Herb Light, which makes a 1-milligram THC beverage, said it's developing a version containing just 0.4 milligrams to meet the new limits.
• Other manufacturers face a more difficult transition, particularly those that depend on higher-dose beverages and traditional retail sales.

The other side: Illinois lawmakers say the legislation is about consumer protection and creating a level playing field for licensed cannabis businesses.

• "This bill accomplishes two important goals at once: it gets unregulated intoxicating hemp products off the streets and out of the hands of kids, and it also helps legitimate cannabis businesses compete," state Rep. Will Guzzardi (D-Chicago) said when the law was signed.

Meanwhile, some Chicago beverage makers are comparing the crackdown to Prohibition.

• "It's like we're doing a prohibition sequel, even when the first prohibition movie was awful. Zero stars," Gordy Sang, co-founder of Herb Light, said in a statement.

What's next: The THC beverage industry isn't going quietly.

• Chicago-based Plift and other beverage makers are organizing a "Last Call" fundraiser Tuesday at Duffy's in Lakeview East, where participants will join a statewide toast at 8pm.
• Organizers hope to set a record for the largest simultaneous THC beverage toast, although they say Guinness World Records won't recognize the attempt because of its cannabis policies, according to organizers.

The bottom line: Unlike the last Prohibition, nobody's going to need a speakeasy. Just a dispensary.