When Regulation is Political, Brand is Infrastructure

There is a version of the current hemp regulatory moment that reads as a beverage story. That version is true, and it matters. But it is also incomplete.

What is actually happening in Washington right now is a sorting event for an entire consumer product category, and the sorting is not being done by science. It is being done by political coalitions with competing commercial interests, working through the only tools Congress has available: appropriations riders, definitional amendments, and regulatory agency mandates. The product formats caught in the middle are not being evaluated on their harm profiles. They are being evaluated on how well organized their opposition is, and how familiar their distribution model looks to the legislators deciding their fate.

That is a different problem than most operators in the hemp space are treating it as, and it has implications that run well beyond beverage.

The scope of the sorting

Section 781 of Public Law 119-37, effective November 12, 2026, narrowed the federal definition of lawful hemp to cover only cannabis derivatives with a total THC concentration of no more than 0.3 percent on a dry-weight basis, and capped finished hemp-derived cannabinoid products at 0.4 milligrams of total THC per container. The definition also excludes hemp-derived cannabinoid products that contain cannabinoids not capable of being naturally produced by the cannabis plant, or that were synthesized or manufactured outside the plant, which effectively bans delta-8 THC and HHC products regardless of their THC concentration.

That threshold does not distinguish between a 100mg vape cartridge marketed to experienced users and a 5mg sessionable beverage designed for a dinner party. It does not assess the retail environment either product moves through. It applies a single container cap across an entire category of products that have almost nothing in common except the plant they derive from. According to estimates from industry groups including the U.S. Hemp Roundtable, cited in analyses by Vicente LLP, the new definition would render approximately 95 percent of existing hemp-derived cannabinoid products federally unlawful. Hemp-derived topicals, edibles, wellness supplements, functional beverages, gummies, and inhalables are all facing the same cliff on the same date, regardless of their individual risk profiles, their consumer bases, or the retail environments they operate in.

This is not a beverage problem. It is a category problem.

Why beverage is the clearest example of what survives

Of all the hemp-derived CPG formats facing this moment, beverage is the one most likely to find a workable path through it, and the reason is instructive for every other format in the category.

Beverage has a distribution model that legislators already understand. The three-tier alcohol system, which Rep. Andy Barr's Lawful Hemp Protection Act (introduced as Amendment No. 54 to H.R. 8646) would apply to hemp-derived beverages, is not a new regulatory construct requiring explanation. It is the infrastructure through which the United States already manages adult consumption of intoxicating products at scale. Age verification, retailer licensing, wholesaler accountability, and point-of-sale controls all exist inside three-tier. When a legislator is asked whether hemp beverages can be sold responsibly in mainstream retail, the answer beverage operators can give is that the system for doing exactly that already exists and has worked for decades. The ask is not to build something new. The ask is to let beverage fit inside what already works.

That argument is not available to every hemp format in the same way. Edibles, inhalables, and topicals do not have an analogous pre-existing regulated distribution model they can point to. The formats that cannot map onto a familiar adult-use framework are the ones most exposed by a sorting event that is, at its core, about political recognizability rather than harm.

As of July 2026, that harm argument is being formally settled in a federal proceeding on the marijuana track. Goodwin Procter LLP attorneys analyzing the DEA's Schedule III hearing structure note that FDA experts are testifying about cannabis's accepted medical use and a more favorable safety profile than alcohol in several respects, and those statements are entering the administrative record with legal weight. The government is making the scientific case for cannabis, formally and on record, while the political case for restricting hemp proceeds through a different process entirely. The products that survive this moment are not necessarily the safest ones. They are the ones whose advocates showed up early, built credibility with the right stakeholders, and made the regulatory path look familiar enough to be navigable.

Senator Ron Wyden, in introducing the Cannabinoid Safety and Regulation Act in December 2025, put the underlying political problem plainly: "We learned from the failed war on drugs that a one-size-fits-all approach banning hemp products from the market outright does nothing to protect kids and consumers." What he did not say, but what the legislative record shows, is that the political conditions for a one-size-fits-all approach were easier to assemble than the conditions for a differentiated regulatory framework. That is not a failure of science. It is a feature of how political sorting works.

What this reveals about building brands in regulated categories

The lesson here is not specific to hemp. It is a lesson about what brand actually means when you are operating in a category where the rules are still being written.

In a stable category, brand is primarily a consumer-facing construct. It is the story you tell, the identity you project, the emotional territory you occupy. Those things matter enormously, and they are the surface layer of what Sands Lane works on every day across CPG and hospitality.

In a regulated emerging category, brand has a second function that most operators underinvest in. Brand is the argument you make to every stakeholder who is not a consumer: the retailer deciding whether to carry you, the distributor deciding whether to route you, the legislator deciding whether your product deserves a workable regulatory home, and the investor deciding whether your category has a durable future. In a regulated category, your brand is also your compliance posture, your formulation transparency, your dosing philosophy, your channel discipline, and the credibility you have built with the people who will eventually write the rules you operate under.

The operators who understood that distinction built businesses positioned for multiple regulatory outcomes. The ones who treated brand as consumer-facing and regulation as a separate risk management function are discovering that the two were never separate.

Culture, content, and commerce have to move together in this environment. Culture gives the brand the permission to exist in spaces regulators recognize as legitimate. Content builds the argument for why the product belongs there. Commerce demonstrates that the infrastructure to serve it responsibly already exists.

The Sands Lane view

The current regulatory moment is compressing a decade of category formation into a single legislative cycle. The brands that built toward a standard are being separated from the ones that built around ambiguity. That separation is happening faster than most operators anticipated, and it is happening across every hemp-derived CPG format simultaneously.

Beverage is the clearest example of what a path through this looks like, because beverage already has the answer to the question regulators are asking: where does this product fit in an adult-use framework that society has already decided to permit? The answer is the cooler. The answer is three-tier distribution. The answer is the same age-verification infrastructure that already governs alcohol at the point of sale.

Every other hemp format is working on a version of that same question. The ones that find a credible answer, and communicate it to the right stakeholders before the November deadline, have a chance to shape what the standard looks like. The ones that do not are operating on borrowed time, and borrowed time in a regulated category has a specific cost: it forfeits the seat at the table where the standard gets written.

That is not a cannabis strategy. That is a brand strategy for any category where the rules are still being written and the operators who show up with clarity are the ones who get to help write them.

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Evan Eneman is the founder of CPG and hospitality consulting firm Sands Lane, beverage advisory and operating platform Harmony Craft Beverages, and co-founder and CEO of Iconic Tonics, a functional beverage portfolio in partnership with Snoop Dogg. He has been building at the intersection of culture, content, and commerce in the cannabis and functional wellness space since 2014.