Nick Fede Jr., Executive Director, Rhode Island Liquor Operators Collaborative.
By Nick Fede Jr., Executive Director, Rhode Island Liquor Operators Collaborative
For years, policymakers have watched the hemp marketplace evolve faster than the laws designed to govern it. Now, with a federal ban on many hemp-derived cannabinoid products approaching, Congress faces a choice that will have serious consequences for businesses, consumers and state economies across the country. This is not a minor policy adjustment. It is a major turning point.
If lawmakers allow a sweeping prohibition to take hold, they will not eliminate demand for these products. They will simply drive that demand out of the legal, regulated marketplace and into the shadows. That would be a mistake for consumers, a mistake for public safety and a mistake for the economy.
The hemp-derived beverage and cannabinoid marketplace has grown because adult consumers have shown they want these products. In response, businesses large and small have invested in production, distribution, compliance, retail operations and workforce development. Independent package stores, wholesalers, suppliers and countless related businesses have built legitimate commerce around a category that can and should be regulated responsibly.
That economic activity matters. These products support jobs, generate tax revenue and create new opportunities for farmers, manufacturers, distributors and retailers. In many communities, especially those served by local beverage license holders and family-owned stores, regulated hemp products represent not just innovation, but an important source of revenue and customer traffic. A sudden federal ban would not just hurt one segment of the market. It would ripple through the entire supply chain, putting pressure on small businesses and reducing economic activity at the local and state level.
But the issue is bigger than economics alone. It is also about whether policymakers want a controlled market or a chaotic one.
We know what happens when government responds to consumer demand with prohibition instead of regulation. Illegal and gray markets do not check IDs. They do not test products. They do not follow labeling rules. They do not pay taxes. They do not train employees in responsible sales. And they do not answer to state regulators. Prohibition does not protect the public from intoxicating products. It removes those products from the systems best equipped to manage them safely.
That is why trade groups across the beverage alcohol industry have been urging lawmakers to reverse course and embrace a better model: regulation through a three-tier system.
The three-tier system has served this country well for generations. It separates producers, distributors and retailers in a way that creates transparency, accountability and enforceable standards at every level of commerce. It gives states the ability to monitor who makes products, who moves them and who sells them. It supports tax collection. It discourages bad actors. And it ensures that intoxicating products are sold in controlled, age-gated environments by licensed businesses with a proven record of compliance.
In other words, we do not need to reinvent the wheel.
If a product is intoxicating, it should be treated seriously. That means clear licensing rules, age restrictions, product testing, accurate labeling, responsible marketing and strong enforcement. It means selling these products through businesses already accustomed to complying with strict laws governing adult-use beverages. Licensed alcohol retailers and wholesalers understand what responsible distribution looks like. They have the systems, the experience and the accountability to handle these products the right way.
This is the framework trade groups have been fighting for. Rather than allowing a broad federal ban to wipe out legitimate businesses and push consumers toward unregulated alternatives, industry leaders have called for lawmakers to adopt practical guardrails that protect both public health and economic opportunity. That includes limits on potency, strict packaging and labeling standards, mandatory testing, age-21 safeguards and a defined regulatory structure that gives states meaningful authority.
That is the balanced approach. It recognizes reality instead of ignoring it. Adult consumers are not going to stop seeking hemp-derived beverages and related products simply because Congress bans them on paper. The real question is whether those consumers will purchase products in licensed stores operating under rules and oversight, or from uncontrolled sources operating outside the law. One path strengthens accountability. The other weakens it.
For Rhode Island and for states across the country, the stakes are clear. We should want a marketplace that is safe, transparent and taxable. We should want businesses that follow the rules to have the opportunity to compete and grow. And we should want policymakers to distinguish between sensible regulation and reactionary prohibition.
The coming federal hemp ban is the wrong answer to a real challenge. Lawmakers should not criminalize a marketplace that can be regulated. They should reverse course, preserve legal pathways for compliant products and integrate intoxicating hemp into the same kind of disciplined three-tier structure that has long governed beverage alcohol.
That is how we protect consumers. That is how we support local economies. And that is how we avoid repeating the mistakes of prohibition.
Contact riliquoroperatorscollaborative@gmail.com to get involved.
Nick Fede, Jr., serves as RILOC’s Executive Director, and the American Beverage Licensees President, and is a third-generation liquor retailer.
