Many hemp beverage companies already sell through alcohol distributors and retail channels in the three-tier system, but it’s only one piece of the puzzle.

If hemp beverages are eventually regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB), companies would need to comply with federal requirements covering production records, tax reporting, labeling, formula approvals, and ongoing compliance.

Before issuing a permit, the TTB reviews the business, its ownership and leadership, and the facility where products will be manufactured and stored. Depending on the type of operation, businesses may also need to obtain a bond or meet other financial assurance requirements.

Regulators expect companies to maintain secure production and storage areas and a track-and-trace system for where products are manufactured, packaged, and shipped.

Even seemingly routine business decisions, such as adding a new production line, expanding warehouse space, or bringing in a new investor, can require permit updates or additional regulatory filings.

 

TTB Readiness Check

Before federal regulations change, ask your leadership team:

• Is our corporate structure clearly established and up to date?
• Would we be comfortable disclosing all owners, investors, and key decision-makers to a federal regulator?
• Is our production facility organized in a way that could withstand a regulatory inspection?
• Can we clearly identify where products are manufactured, stored, and shipped?
• If we expanded our facility, added new equipment or brought in new investors, would we know what regulatory filings might be required?

 

Every Can Needs a Paper Trail

Unlike the regulated cannabis industry, where many states require businesses to use designated track-and-trace platforms such as Metrc or BioTrack, TTB does not require companies to use a specific software system. Companies have the flexibility to choose the tools that work best for their operation, but they’re responsible for maintaining complete records of every production run.

That means down to where ingredients came from, which batches they were used in, when products were manufactured, where they were stored, and where they were shipped. If product is lost, destroyed, or returned, those records need to reflect it.

Accurate records also allow companies to quickly reconcile inventory, trace ingredients through production, respond to recalls, and investigate quality issues without scrambling to piece together records after the fact.

Many beverage manufacturers rely on ERP systems or other inventory management software to handle these tasks, while smaller companies may use simpler solutions. Whatever the system, the records should tell the complete story of every batch from raw ingredients to finished product.

 

TTB Readiness Check

Ask your operations and quality teams:

• Can we trace every ingredient lot into every finished batch?
• Are batch records completed in real time rather than after production ends?
• Can we reconcile inventory from raw ingredients through finished goods?
• How do we document product losses, damaged inventory, or destroyed product?
• If we needed to conduct a recall tomorrow, could we quickly identify every affected batch and customer?
• How long would it take us to produce six months of production records for an inspection?
• Are supplier records, certificates of analysis, and ingredient specifications organized and readily accessible?

 

The Label Is Part of Compliance

Under TTB regulations, a label is also an important part of the product compliance review.

In addition to the brand name and graphics, labels may need to include specific information such as net contents, producer information, ingredient declarations, or other required statements, depending on how hemp beverages are ultimately regulated. Marketing claims could also receive greater scrutiny, particularly statements that imply health or therapeutic benefits or cannot be supported.

Product changes, formulation changes, or label updates may require additional review before packaging goes to print. Many established beverage companies have formal label review processes to confirm that packaging information is accurate and meets regulatory requirements.

Marketing teams that have operated in a less regulated environment may need to rethink how products are positioned. Claims that are common in today’s hemp market may face greater scrutiny in a federally regulated beverage category.

TTB Readiness Check

Ask your marketing, product development, and compliance teams:

• Who has final approval before a label is sent to the printer?
• Do we have a label review process?
• Can we support the claims made about our products?
• Can we quickly update labels across every SKU if regulations change?
• Are regulatory, quality, and marketing teams reviewing labels together before production begins?
• How do we verify that every printed label matches the approved version?

 

Formula Development Remains One of the Biggest Questions

Unlike traditional beverage ingredients, cannabinoids have not had a clearly defined pathway for use in food and beverages. Since the 2018 Farm Bill created the hemp-derived market, companies have developed products using cannabinoids such as CBD, CBG, and THC, but federal guidance on which cannabinoids can be used in beverages and under what conditions remains nonexistent.

A TTB framework would need to clarify which cannabinoid ingredients can be used in regulated beverages. Until then, companies are developing formulas without knowing which products will ultimately be allowed.

 

TTB Readiness Check

• Do we have records supporting the cannabinoids and ingredients used in our formulas?
• Are we monitoring potential federal changes that could affect our products?
• Do we have a process for reviewing formula changes before launch?
• How quickly could we reformulate if a specific ingredient faced new restrictions?

 

Production Numbers Have to Match Inventory

TTB records are designed to show what was produced, what was sold, what remains in inventory, and if any product was lost, damaged, returned, or destroyed. Those records allow regulators to verify that inventory matches sales so that taxes are accurately reported.

Excise tax reporting also introduces a new financial responsibility for companies that have not previously operated in a federally regulated beverage category. For companies that have never operated under federal beverage excise tax requirements, finance teams will need to understand how production, inventory, and sales activity are taxed.

A company that produces 100,000 cans needs to account for every one of those cans.

 

TTB Readiness Check

Ask your operations and finance teams:

• Do our production, inventory, and accounting records reconcile?
• Can we explain differences between what was produced and what remains in inventory?
• Are product losses documented and recorded correctly?
• Are inventory adjustments reviewed and approved?
• Can we provide records that support tax reporting?

 

Quality Control and Standards

The final TTB requirements for hemp beverages have not been established, but GMP standards offer a useful benchmark for companies preparing for increased federal oversight. GMP provides a structured approach to manufacturing with defined procedures and controls that help ensure products are made the same way each time.

GMP systems help companies create repeatable processes that can support increased production without relying on individual employees to determine how products are made.

Quality control also involves the suppliers and partners behind the product. Companies need to verify that ingredients are properly sourced and that manufacturing partners adhere to the required standards.

 

TTB Readiness Check

Ask your quality and operations teams:

• Are our key production processes documented?
• Would a new employee know how to perform critical tasks correctly?
• Are procedures reviewed and updated as processes change?
• Do employees receive training on the procedures they follow?
• Can we show that our processes are followed consistently?

 

Building the Right Team

Many hemp beverage companies have built their businesses with lean teams, often relying on founders and executives to manage multiple areas of the operation. As oversight increases, companies will need people with the expertise to oversee product development, manufacturing, labeling, and financial reporting.

Larger companies may build these functions internally, while smaller brands may rely on outside specialists, consultants, or advisors with experience in regulated industries.

Many of the systems used in regulated beverage industries are good business practices that help companies improve consistency, manage growth, and reduce operational risk.

 

Companies can begin by evaluating where they stand today. That includes building GMP-based manufacturing practices, strengthening quality systems, reviewing labeling practices, improving inventory controls, and ensuring production and financial records are connected.