Nick Fede Jr., Executive Director, Rhode Island Liquor Operators Collaborative.
Why a Federal Ban on Hemp-Derived THC Beverages Would Harm Workers and Small Businesses
By Nick Fede Jr., Director, Rhode Island Liquor Operators Collaborative
Across the country, the hemp-derived THC beverage market has grown from a niche product into a legitimate sector of the American economy. From farmers and manufacturers to distributors, retailers, and hospitality businesses, thousands of workers now rely on this emerging industry for their livelihoods. Yet today, those jobs are at risk. A federal crackdown on hemp-derived THC products—particularly beverages—threatens to dismantle a rapidly expanding sector that has become an important economic engine in communities nationwide.
What some policymakers view as a regulatory fix could instead trigger widespread job losses, shutter small businesses, and disrupt supply chains that stretch from rural farms to Main Street retailers. To understand what’s at stake, we need to look at the numbers.
The U.S. hemp industry has grown into a multi-billion-dollar market since hemp was federally legalized in the 2018 Farm Bill.
Today, the broader hemp economy is estimated to generate roughly $24–$28 billion annually and support more than 300,000 jobs across the United States. Those jobs are not concentrated in one place or one segment of the economy. They exist at every level of the supply chain.
Farmers grow hemp as a cash crop. Processing facilities extract cannabinoids. Beverage companies manufacture infused drinks. Distributors transport them. Retailers—namely liquor stores—sell them to consumers.
When policymakers talk about banning hemp-derived THC beverages, they often focus narrowly on the product. But what’s really being debated is the fate of an entire ecosystem of workers and small businesses.
Industry experts warn that federal restrictions on hemp-derived cannabinoids could wipe out as much as 95% of the hemp retail market, effectively eliminating the largest revenue stream supporting hemp farming and product manufacturing. If that happens, the impact will ripple far beyond the companies producing THC beverages.
Farmers would lose their most profitable crop market. Manufacturing facilities would lose orders. Distributors would lose product lines. Retailers would lose a growing category that attracts new customers. And workers—often in small towns and local communities—would lose jobs.
Here in Rhode Island, we are already seeing the emergence of hemp-derived THC beverages as a legitimate retail category. These products are increasingly sold alongside traditional beverage offerings in licensed stores, providing consumers with regulated alternatives and giving retailers a new revenue stream.
For many independent liquor stores, diversification is essential to survival in today’s competitive market. Hemp-derived beverages have allowed retailers to reach customers looking for low-dose alternatives or alcohol-free social options.
If the federal government eliminates that category overnight, the consequences will be immediate. Retailers will lose revenue. Local sales representatives, warehouse workers, and delivery drivers will see opportunities disappear. Small businesses cannot absorb shocks like that easily.
The national examples we’re already seeing should serve as a warning. In states where hemp products have taken hold, entire industries have formed around them. For example, some craft breweries have reported that THC beverages account for more than a quarter of their distributed product revenue.
Remove that revenue stream, and those businesses are forced to make difficult decisions—cut staff, close facilities, or abandon investments made in good faith under federal law. This is not how sound economic policy should work. Let’s also remember how we got here.
Congress legalized hemp nationwide in 2018 specifically to create new economic opportunities for American agriculture and small businesses. That legislation removed hemp from the federal controlled substances list and allowed products derived from hemp—within certain limits—to be produced and sold legally.
Since then, entrepreneurs have invested millions of dollars building companies around hemp-derived products, including beverages. They hired employees. They signed leases. They purchased equipment. They built brands. And now, many of them are facing the possibility that the rules will change overnight.
At RILOC, we believe thoughtful regulation—not prohibition—is the responsible path forward. Consumers deserve clear labeling, responsible age restrictions, and consistent safety standards. Retailers deserve regulatory clarity. Workers deserve job security. But a sweeping federal ban on hemp-derived THC beverages would accomplish none of those goals. Instead, it would destroy legitimate businesses while pushing demand toward unregulated markets. That outcome benefits no one.
Public policy should protect public safety while preserving economic opportunity. With hundreds of thousands of American jobs tied to the hemp economy, lawmakers must recognize that the consequences of prohibition extend far beyond the products themselves.
They affect farmers, truck drivers, warehouse workers, beverage manufacturers, and the independent retailers who anchor communities like ours. The question before policymakers is simple: Will we regulate this industry responsibly—or eliminate the jobs it created? For the sake of American workers and small businesses, the answer should be clear.
Nick Fede Jr. serves as RILOC’s Executive Director, American Beverage Licensees’ Vice President (Off-Premise) and is a third-generation liquor retailer.
