Colorado’s New THC Beverage Bill Could Set a National Model

Colorado lawmakers have introduced a sweeping proposal to regulate hemp‑derived THC beverages, positioning the state to reclaim a leadership role in cannabis policy while offering a potential roadmap for others navigating the fast‑moving category.

The Regulation of Lawful THC Beverages bill (SB26-164), introduced late last week, would create a licensing structure for low‑dose THC drinks and allow on‑premise sales in bars, restaurants, music venues, and other alcohol‑licensed locations. Supporters say the measure meets rising consumer demand for alcohol alternatives and could generate tens of millions in new tax revenue for a state facing a significant budget shortfall.

Bill Caps THC Levels for Hemp-Derived Beverages

The bill, sponsored by Sen. Julie Gonzales and Reps. Matt Martinez and Steven Woodrow would permit beverages containing up to 10 milligrams of THC per serving to be sold in licensed alcohol venues. Lower‑dose products with up to 3 milligrams per serving could be sold in grocery and convenience stores that already hold retail licenses. Lawmakers say the framework mirrors Colorado’s existing alcohol regulations, giving regulators and businesses a familiar structure for age verification, responsible service, and compliance.

“This law will produce an estimated $55 million in annual revenue at a moment when Colorado urgently needs to fund key services like healthcare and education,” Gonzales said in a press release. “Even better, we can create that new source of revenue by giving consumers the very simple thing that they want: responsible access to THC beverages in licensed venues.”

Federal Hemp THC Ban Looms

The proposal arrives as states across the country continue to wrestle with how to regulate hemp‑derived intoxicants, particularly low‑dose beverages that have surged in popularity, while a federal ban on such products is set to take effect in November. Colorado’s bill would establish product standards, labeling rules, supply‑chain oversight, and mandatory training for staff serving THC drinks. It also includes enforcement mechanisms such as inspections and penalties for noncompliance.

“This is what good policy looks like: meeting a market where it already exists, putting guardrails in place and making sure the benefits flow back to Colorado communities,” Woodrow said. “Low‑dose THC beverage regulation is a smart, forward‑looking way to both protect consumers and strengthen our state’s fiscal future.”

THC Drinks Coalition Backs Colorado Bill

The measure is backed by the THC Beverage Coalition, a group that includes Keef Cola, Vertosa, Fable, Fabric, Green Parcel Services, and Willie’s Reserve. Coalition members say the bill reflects years of work to modernize hemp beverage laws and create a stable regulatory environment for businesses and consumers.

Diana Eberlein, chief external affairs officer for Vertosa, said the proposal could help shape policy far beyond Colorado. 

“Colorado’s proposed legislation has the potential to serve as a meaningful model for other jurisdictions,” she told IgniteIt in an email. 

Eberlein noted that states including Tennessee, Alabama, and Kentucky are already experimenting with their own approaches, “reflecting how states learn from one another while tailoring policies to fit their own markets, much like the state‑by‑state approach used for alcohol regulation.” She added that state‑level action could influence the national conversation as Congress faces pressure to revisit the hemp provisions included in the federal spending package. 

“Advancing thoughtful, common‑sense legislation at the state level strengthens the broader federal effort to revisit and ultimately amend the ban included in the federal spending package. State leadership matters, and the principle of states’ rights continues to carry significant weight in federal decision‑making,” said Eberlein.

National Advocates Back Colorado Hemp Drinks Regulation Proposal

National hemp advocates are also watching Colorado closely. Jonathan Miller, general counsel for the U.S. Hemp Roundtable, said the bill represents an important step at a moment when the federal landscape remains unsettled. 

“We are excited about the bill’s introduction, and look forward to engaging in ensuring the strongest legislation possible to promote the hemp beverage industry,” Miller wrote in a statement to IgniteIt. 

He added that advocates hope the final version “can be a model for other states that are grappling with these issues, as well as a demonstration to Congress that the impending hemp ban must be reversed and replaced with robust regulatory regimes such as the one implicit in this Colorado legislation.”

Colorado’s fiscal analysts estimate the state could collect roughly $55 million annually once the market matures, based on comparisons to Minnesota’s fast‑growing hemp beverage sector. The projection includes revenue from wholesale taxes, retail sales taxes, and a proposed 10% hemp beverage tax.

For Colorado, the bill represents both a regulatory update and a strategic attempt to reassert leadership in a space the state helped pioneer more than a decade ago. Supporters say the measure would bring clarity to a market that has expanded faster than existing rules can accommodate, while giving consumers access to products in settings where responsible service is already the norm.