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A 'loophole' allows THC seltzers to be sold in CT. Soon, they could have their own set of rules

By Jordan Nathaniel Fenster,Staff writerApril 20, 2024

Stew Leonard’s Wines and Spirits of Norwalk, Danbury and Newington started stocking their shelves with THC beverages in September 2023. The CANN THC tonics pictured above at the Norwalk location come in flavors like lemon lavender, grapefruit rosemary, and blood orange cardamom.

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Kalleen Ozanic/Hearst Connecticut Media Group

THC seltzers can get you high, but Connecticut lawmakers are poised to put them in a category all their own, distinct from every other product that contains THC.

Connecticut will likely create a separate system for taxation of THC seltzers with different rules than those governing cannabis products, so infused beverages can remain in package stores.

Rino Ferrarese, owner of Affinity Grow in Portland, is one of only six operational cannabis growers in Connecticut. He said he’s heard from cannabis food and beverage manufacturers, retailers and cultivators, and, “Nobody wants the beverage alcohol industry selling cannabis products.”

“Connecticut's market is still young and many businesses are still in the process of opening. It doesn't make sense to give away the beverage sales in advance of the food and beverage manufacturers becoming operational,” he said. “Especially since the package stores will purchase THC beverages from outside the program.”

Should the bill pass in its most recent form, the state will effectively create four categories of products with THC, each with their own set of regulations.

Cannabis products may only be grown, produced and tested in Connecticut, and may only be sold by legal, licensed retailers and medical cannabis dispensaries. Cannabis products are subject to both state and local taxes, in part dependent on how potent they are.

Home-grown cannabis is legal but limited to six plants, three mature and three immature, grown indoors. High-THC hemp products are derived from plants with THC concentration lower than 0.3 percent by dry weight, but have been chemically altered to be more potent. 

THC-infused beverages would be in their own category. sold in package stores or licensed cannabis retailers — not in supermarkets, restaurants or bars —and would contain no more than 3 milligrams of THC per can. By contrast, a cannabis gummy contains 5 milligrams of THC. Should the law pass, there would also be a $1-per-package assessment to the state, split by the wholesaler and the retailer. 

“All of that money would go, at least right now under the bill, to the DCP enforcement account,” said state Rep. Michael D’Agostino, D-Hamden, chairman of the legislature’s general law committee.

There are currently 10 Connecticut companies with cannabis food and beverage manufacturing licenses, only three of which are final. But THC seltzers, unlike legal cannabis products, could be manufactured anywhere, derived from hemp grown outside of Connecticut and tested at any lab in the U.S., though test results would be published and available online. 

“Rather than creating something from whole cloth, we are shoehorning it into our existing liquor statutes, which makes the regulation a bit easier and frankly, more robust,” D’Agostino said. “We want to make sure that the sales are regulated and controlled, and we want to make sure we've got a group of retailers who we can oversee the sales, which makes it easy for us to oversee the sale so the liquor stores were a natural fit for that. They're the ones who proposed this, were the main backers of it.”

Larry Cafero, president of the trade association Wine & Spirits Wholesalers of Connecticut, said his goal was to keep the sale of THC beverages controlled. 

“What we saw was a product being introduced to the market with no regulation whatsoever. It's like the wild, wild west,” he said. “What we called for is regulation, at least as to age and venue.”

Though Ferrarese spoke vociferously against the proposal, Ben Zachs, president of cannabis retailer Fine Fettle, said THC seltzers make up a tiny portion of their sales. 

“We hope to see the licenses of the food and beverage manufacturers succeed, but it's not been the main priority of our business,” he said. “We're looking to see how we can best bring the drinks, or not, to the consumer.”

By contrast, Wherehouse Beverage Co., makers of Wynk THC seltzer, told the legislature in testimony that they expect more than 32 million cans of THC seltzer to be sold annually in Connecticut which, at $5 per can, would mean more than $163 million in sales.

Steve Palauskas, owner of Connecticut Valley Brewing in South Windsor, told the legislature that his company needs the sale of THC seltzers to survive. “My business needs this product because it is the extra revenue generated that keeps all 45 men and women employed,” he said. 

D’Agostino, who initially proposed keeping all legal THC products sold by licensed shops, said the cannabis retailers he’s spoken with “do not view the drinks as competing with their product lines.”

“They don't seem to want to carry the drinks, which is understandable,” he said. “There's a shelf space and an expiration date cost to all those products and the customers who want flower are buying flower, the customers who want vapes are buying vapes, and they’re not going to lose those customers to a 3 percent THC drink so they don't have an issue with it.”

THC seltzers are legal because of the 2018 federal farm bill that legalized hemp and CBD. That bill is overdue for reauthorization, and several attorneys general, including Connecticut Attorney General William Tong, have signed onto a letter asking congress to close what they see as a loophole allowing the sale of THC products like seltzers. 

That bill made legal THC products made from hemp and, whatever the state legislature does, if that federal law changes THC seltzers could become illegal. 

“These products because they're legal federally, we can't ban them,” D’Agostino said. “For a Congress that is so opposed to cannabis legalization to allow what is a massive loophole that has allowed all these THC products to be out there, I'm stunned they haven't closed that loophole.”

If that loophole does get closed at the federal level, state law would have to change yet again, to allow the sale of THC seltzers. 

“I'm not sure how long-lived the THC seltzer thing will be, quite frankly,” D’Agostino said. “Because if they closed that loophole, then we would have to say, “Okay, the only way you can sell these drinks in Connecticut is to have solely Connecticut manufacturing facilities established.”



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