Kehoe signs hemp regulation bill reshaping Missouri cannabis market, sparking industry backlash
JEFFERSON CITY, Mo. (KMIZ)
Gov. Mike Kehoe signed House Bill 2641 into law on Thursday, a measure that tightens regulations on hemp-derived cannabinoid products and is expected to significantly reshape Missouri’s hemp industry by requiring many of those products to be sold only through licensed marijuana dispensaries.
The law effectively bans the sale of THC seltzers and other intoxicating hemp products at convenience stores, bars and restaurants, shifting much of the market into Missouri’s regulated cannabis system. It also reclassifies certain hemp-derived products, including some sold as CBD, as marijuana if they meet specific criteria, subjecting them to stricter oversight.
Supporters say the move is aimed at protecting children and cracking down on products they argue are being marketed in ways that appeal to minors.
“So what this bill is doing is simply put is we are eliminating and banning things like this,” Sen. David Gregory (R-St. Louis) said while holding THC products in packages designed to look like Oreos and Doritos. “See, right here, it looks like an Oreo package, but it actually has to serve marijuana and they're labeling it to send that they're illegally selling these. So we’re putting an end to things like that. These are the kinds of things that we are putting an end to. They’re dangerous. They’re dangerous for our kids, they’re dangerous in our communities.”
Kehoe echoed those concerns, saying the decision ultimately came down to public safety.
“There are two sides to this issue, and unfortunately, the governor has to say 'yes' or 'no' to a bill. It doesn’t get to design a bill,” Kehoe said. “Protecting kids is, I think, the primary responsibility of elected officials, and this is very important to protect our kids from having access to those harmful drugs. Unfortunately, some bad actors made that happen.”
The bill includes strict enforcement measures, with businesses that continue to sell restricted products outside the regulated system facing a $5,000 fine per transaction and a potential Class D felony charge.
The measure has drawn strong opposition from the hemp industry, which warns it will have sweeping economic impacts, including from the Missouri Hemp Trade Association, which launched a campaign urging Kehoe to reconsider.
“We're deeply disappointed that he's signed the bill. We brought him over 10,000 handwritten letters from consumers and people who were employed in the industry last week to try to impress upon him how wide-ranging the opposition is to 2641. Additionally, there were over 2,000 petition signatures, so that's the largest handwriting letter campaign in the history of the state and any issue,” said Craig Katz with the Missouri Hemp Trade Association.
The law could affect an estimated 40,000 businesses statewide, including small retailers. Katz warned it may also harm family farms that rely on hemp revenue.
“A lot of these family farmers that we're talking about, and they are mostly family farmers, they use their hemp crops to subsidize the operation of the rest of their farms,” Katz said. “If you take those profits away from them, then they may have a hard time getting the rest of their farm to produce and to be successful. So not only are you impacting the hemp crops specifically, but there are corollary crops that are going to be affected as well. So you may see a lot of these farmers that are going to lose their farms.”
Lawmakers argued the new law will align Missouri with federal legislation pending in Congress. However, the Missouri Hemp Trade Association criticized how lawmakers handled the issue, arguing they should have waited for potential federal regulations to become final.
“We tried to explain to members of the legislature, including Representative Hinman, who sponsored this bill, that he was jumping the gun on what Congress may or may not do,” Katz said. “We asked him specifically to include language if he was going to make this bill his priority, if he would include language that said that Missouri would align itself with the federal regulations so that if the feds extended the enactment date to past Nov. 12, for instance, for an additional year, or if in the interim they passed legislation that regulated the industry, that Missouri would align themselves with it. He promised us he would do that, and then he turned around and didn't do it.”
Katz added while the industry supports removing unsafe products, he believes the bill punishes legitimate operators.
“There absolutely are bad actors. And in the industry, we want to get them out of the marketplace,” Katz explained. “We've met with the attorney general and said we're happy to cooperate with them, collaborate with them, and identify bad products and identify bad actors and help them to enforce that.”
He also questioned whether the law would achieve its stated goal, arguing that deaths from alcohol consumption far exceed deaths from hemp-derived cannabis. According to Katz, regular household products have caused more deaths during the past year than cannabis products have in the last 13 years combined, citing a study from the Centers for Disease Control and Prevention.
“It does not protect children anymore because parents can go into the licensed marijuana dispensaries and buy the exact same products, bring them home, and have the exact same issues happen with their children. It begs the question of what they're really trying to accomplish,” Katz said.
Katz further alleged the legislation benefits the marijuana industry at the expense of hemp businesses.
“I think legislators are lazy. They don't want to go through the process of actually passing a regulation and fulfilling their responsibility to their constituents. I think the other issue that you have to deal with, unfortunately, is the money that is behind the marijuana industry that gets pumped into these politicians through PACs and donations that influence their voting,” Katz said. “There's no question that the marijuana industry wants to own the hemp industry. They see their numbers going down. They are in competition now, especially with THC beverages. And then they see market share disappearing. And so, as opposed to being able to be competitive, which is the way business should operate, they've decided that they want to own the industry so they don't have to compete with it.”
Kehoe acknowledged concerns about the impact on farmers and businesses but said the issue could be revisited in the future.
“I would encourage anyone who has medicinal uses or other uses to help support legislation to bring it back forward to help those family farms and those employees in the hands of people that’s legitimate,” Kehoe said. “And the last thing I will say is the federal law, as you know, goes into effect in November. This mirrors the federal law.”
Kehoe also pointed to the bill’s broad bipartisan support in the legislature.
“This has been before the legislature for years. And so they had many twists and turns about what was criminalized. There’s been multiple iterations of the bill,” Kehoe said. “As I mentioned, when I signed a bill, this was a bipartisan bill 151 'yes' and 28 'no' that worked through the process. And you have to respect the legislative process. They want to do what they thought was most important.”
Katz said the industry is now exploring next steps, including possible legal action or future legislative changes.
“Depending upon what the Congress does in terms of whether or not they pass a regulatory framework in the next couple of months, which is very possible, I would suspect that we will approach legislators and ask them if we can if someone is willing to sponsor legislation that will either amend 2641 or supersede 2641 to bring it in line with the federal regulations that we hope that are going to get passed. The alternative to that, of course, is legal action,” Katz said. “We will explore every option that's out there to try to protect the industry and thus the jobs of the thousands of people that are out there.”
