The uncertainty surrounding a potential November 12 federal hemp beverage ban is forcing every part of the industry’s three-tier supply chain to make difficult decisions. Manufacturers are weighing production schedules, distributors are managing inventory and expanding cautiously, and retailers are deciding whether to continue investing in a category that could change overnight. Because every decision affects the next link in the chain, the industry’s actions have become a balancing act between growth and risk.

At the recent Hemp Beverage Expo in Austin, Texas, distributors from across the country discussed how they’re preparing for the months ahead. The panel explored whether they’re still adding brands to their portfolios, expanding retail distribution, and investing in the category while examining how retailers are reacting to the changing regulatory landscape and what contingency plans are already in motion.

The Retailer’s Perspective

One of the biggest questions facing brands and distributors is whether retailers will continue to embrace hemp beverages or when they plan to pull the plug on ordering. While the panelists represented markets with very different regulatory environments, most said retailers remain committed to the category but are becoming more selective about inventory and new product introductions as everyone starts to scale back.

Rather than pulling away from hemp beverages, many retailers are prioritizing proven products, carefully managing stock levels, and delaying some new brand introductions until there’s greater regulatory clarity.

In New Jersey, Sara Harmelin of Allied Beverage Group said retailers continue to support hemp beverages despite the state’s evolving regulatory framework. Rather than abandoning the category, many are focused on maximizing product sales in the short time frame they have left.

Approximately half of New Jersey’s roughly 2,000 retailers currently participate in the category, and Harmelin suggested that number has likely reached its ceiling under the current regulatory environment.

In Illinois, JP Glunz of Louis Glunz Beer said retailer sentiment largely depends on store size. Large chain retailers and beverage depots continue adding shelf space for hemp beverages, while many independent retailers have become more cautious, trimming shelf space slightly but remaining committed to the category. Meanwhile, on-premise accounts continue to embrace hemp beverages, with bars and restaurants increasingly willing to promote them through marketing and programming.

Rick Craig of RH Berringer described North Carolina as a largely unregulated market where retailers have voluntarily adopted responsible operating practices to establish a proper market. After the initial surge in retail participation last year, large chains have shifted into a wait-and-see mode over the past six months, particularly those influenced by their national parent companies. Even so, Craig said existing retail partners continue to grow sales, and he has not seen them exiting the category.

Justin Shaw of M.S. Walker said retailer support has remained steady in markets such as Rhode Island, where licensed retailers have already invested time and resources to enter the category. Because they’ve completed the licensing process, he said they’re committed to making the category succeed.

In Wisconsin, Moose Thompson of LB Ventures said major chains, including Festival Foods, Woodman’s, and Kwik Trip, continue to actively promote hemp beverages through advertising and retail programming.

While some retailers paused adding new suppliers during their annual category reviews because of the November deadline, they continue to work with existing brands. Thompson said retailers are relying on previous sales data to help forecast demand heading into the fall.

Weighing the Distributor Risk

Distributors sit between brands and retailers, balancing inventory and demand during this period of uncertainty. They also face the greatest regulatory exposure if federal law changes. Most of the panelists said they entered the category expecting regulatory volatility and understood the risks before committing, having conducted their due diligence rather than assuming that regulations would evolve and that periods of disruption were part of building an emerging category.

For distributors licensed to sell alcohol, the greatest concern isn’t whether hemp beverages remain legal. Carrying products prohibited under federal law will jeopardize the federal permits that allow them to operate their core business.

Craig said that’s why the potential November deadline has become the industry’s single biggest regulatory concern. Although North Carolina has taken a largely wait-and-see approach to regulation, alcohol distributors don’t have that luxury because their federal permits are at stake.

Sara Harmelin echoed those concerns, noting that NJ distributors licensed through the Alcohol and Tobacco Tax and Trade Bureau (TTB) cannot simply hold prohibited inventory in their warehouses if federal law changes.

Across the panel, inventory was the dominant financial concern.

Craig said RH Berringer currently holds approximately $1.4 million in hemp beverage inventory and is actively planning how to manage those products if regulations change.

Other distributors described working closely with suppliers to reduce exposure by monitoring sales velocity, slowing reorders on underperforming SKUs, and establishing cutoff dates for future purchases. Several acknowledged the challenge of forecasting demand, with the possibility of either running out of product before November or being left with excess inventory afterward.

Panelists said they’re favoring suppliers with long-term brand potential, differentiated portfolios, and those willing to actively support retail sales.

Justin Shaw said inventory planning is similar to introducing any emerging beverage category. The focus remains on disciplined portfolio management, evaluating sales velocity, and collaborating with suppliers and retailers to build long-term programs. He added that M.S. Walker is honing in on a curated approach by selecting brands that fill underserved segments rather than simply expanding its portfolio.

Contracts and Communication

Several panelists said contractual agreements with suppliers have become increasingly important as regulatory risk has grown, with expectations that tensions across the supply chain will intensify as uncertainty persists.

Harmelin said Allied Beverage Group includes provisions requiring suppliers to repurchase inventory if changes in federal law make products unsellable. Shaw noted that M.S. Walker has also established supplier agreements that clearly define responsibilities should a worst-case scenario occur.

Craig said many retailers assume distributors will take back unsold inventory if federal regulations change. RH Berringer has already communicated to retail partners that product returns are not part of its policy, although the company will work with customers to help manage inventory before any regulatory deadline.

Beyond contracts, distributors said frequent communication with suppliers, retailers, and sales teams has become one of their most valuable risk-management tools.

JP Glunz said his team emphasizes transparency with retailers while reminding sales representatives not to speculate on legal or regulatory issues. Instead, they encourage employees to ask questions, share accurate information, and work collaboratively across all three tiers of the supply chain.

Moose Thompson said misinformation has become one of the industry’s biggest challenges, with rumors spreading quickly through social media and creating confusion among retailers. His company regularly addresses questions during sales meetings to ensure employees and retail partners are working from the same information.

Rick Craig encouraged manufacturers to increase communication with their distributor partners as November approaches. “Dial up the communication more than you think you even need to. We want to talk to you. We don’t have all the answers either.” He said suppliers and distributors need to stay aligned and work through potential scenarios together as regulations continue to evolve.

The Biggest Risk May Be Sitting on the Sidelines

Despite the uncertainty, Craig argued that the greatest long-term risk isn’t participating in the category at all.

He said some distributors have already exited hemp beverages because of regulatory concerns, but believes they’re overlooking growing consumer demand and a significant business opportunity. In his view, companies that choose not to participate risk missing what could become an important beverage category in the years ahead.

Advice for Emerging Brands

During the audience Q&A, one emerging brand asked what distributors are looking for today, given that many companies have temporarily slowed portfolio expansion ahead of November.

The panelists agreed this is one of the most challenging periods to secure distribution, but said brands can improve their future chances by demonstrating market traction rather than waiting for distributor support.

Rick Craig encouraged new brands not to wait for distribution, but to begin building momentum through self-distribution during this period.

“Success will breed success. Don’t wait to get a yes from a distributor before you enter the marketplace.”