Lawmakers weigh delay of in-state testing for THC seltzers
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Minnesota lawmakers are weighing a one-year delay of in-state testing requirements for the low-dose THC seltzers and gummies that have flooded breweries and liquor stores.
Why it matters: The move could alleviate a backlog at state labs and offer some immediate relief to an industry that's facing existential threats due to competition from the new adult-use cannabis market and a looming federal ban.
The big picture: A slow rollout of state-licensed testing facilities has been a buzzkill to the state's booming adult-use market.
- Just two labs are running, leading to wait times of up to seven weeks for legal cannabis products sold at dispensaries cropping up across the state, per the Star Tribune.
State of play: Hemp-derived THC seltzers and lower-potency products, which have been legal since 2022 and can be sold at a wide range of stores and served on tap at bars and restaurants, were supposed to transition from out-of-state to in-state labs as of Jan. 1.
- But state officials agreed to effectively delay the deadline until April, after retailers and manufacturers warned that the shift, along with new labeling rules, would create inventory issues and "cause many small businesses to close or move out of Minnesota."
What they're saying: "There was just literally no way to make it work with the number of labs, especially with adult-use coming on board, too," Bob Galligan, government relations director for the Minnesota Craft Brewers Guild, told Axios.
Between the lines: Galligan said requiring in-state testing now would be especially detrimental to brewers, who typically wait to can their drinks until sample testing shows that it is "up to spec."
- "It would kink the hose," he said of waiting weeks for results instead of the 48-hour turnaround offered by labs elsewhere. "And whether or not the hose would be unkinked ever would be a decent question."
The response: State Sen. Lindsey Port, one of the authors of the 2022 legal marijuana law, has introduced legislation to allow the lower-potency hemp-derived products to continue to be tested at accredited out-of-state labs until summer 2027.
What they're saying: The Burnsville Democrat told Axios that while the goal remains for all products to be tested in Minnesota, the extension will help alleviate the bottleneck and allow labs to focus on adult-use cannabis until the local testing capability ramps up.
What we're hearing: Minnesota Office of Cannabis Management director Eric Taubel told Axios that his agency supports the bill as a "valuable" short-term fix that will provide clarity to industry and "ease some of the burden our testing facilities are currently facing" while ensuring quality control for products.
- "There is a capacity challenge right now in the market, and this will alleviate some of that," he said.
Zoom out: State cannabis officials say the cost and expertise required to operate these labs slowed their effort to recruit and launch more licensed facilities. But there are signs that more will be online soon.
- Ten more facilities have secured preliminary approval, state data shows, and Port said she expects five or six more to be operating in the coming months.
What we're watching: Industry leaders and top Minnesota Democrats are still lobbying to reverse a recent change in federal law that they've warned would effectively ban the lower dose drinks and edibles starting in November.
- "If nothing changes on that federal language, then we're done," Galligan said. "The market is just killed."