A HAZY FIVE HOURS: MINNESOTA SHOULD NOT REINVENT THE WHEEL IN ADDRESSING THC BEVERAGES IN RESTAURANTS

By Shannon Schooley, Volume 108 Staff Member

In 2023, Minnesota legalized recreational cannabis.[1] Although Minnesota followed twenty-two states and the District of Columbia in doing so,[2] its legal landscape presents unique regulatory challenges.[3] Minnesota’s full-scale recreational legalization comes on the heels of a partial legalization in 2022 for edible, low-potency, hemp-derived THC products that unleashed a relatively unregulated industry.[4] In addition to laying out a multi-year roadmap for full-scale recreational cannabis legalization and expungement of low-level cannabis offenses, the 2023 legislation sought to respond to the holes in the previous partial legalization.[5] One such provision—set to take effect in 2025—restricts THC service to an individual who has consumed alcohol in the past five hours.[6] This language sets an unwieldy enforcement standard and unnecessarily expands liability for bars and restaurants. This Post argues that legislators should simplify the standard before it takes effect.

I. MINNESOTA’S CANNABIS LEGALIZATION HISTORY

Minnesota’s cannabis market began in 2014 with the legalization of medical cannabis,[7] a program often described as one of the most restrictive in the country.[8] Next, the Federal 2018 Farm Bill carved out hemp-derived THC up to a concentration of 0.3% as an exception to the Controlled Substances Act.[9] The Farm Bill, perhaps accidentally, essentially legalized a non-intoxicating level of THC that became the base ingredient for manufactured intoxicating products.[10] States were given explicit permission to regulate such industrial hemp more restrictively, including authority to completely ban THC products regardless of the source.[11] In states without prior restrictions in place on specific cannabinoids,[12] including Minnesota, a loophole opened and intoxicating hemp-derived THC products made their way into the market despite the states not having legalized cannabis.[13]

In 2022, Minnesota legislators sought to respond to the unregulated availability of THC products by passing legislation permitting only edible products with small amounts of hemp-derived THC.[14] However, the legislation included minimal regulation regarding licensing and the types of establishments allowed to sell the products.[15] As a result, a booming market of edible, hemp-derived THC products appeared.[16] Production and sales of THC beverages in particular took off.[17] Without specification as to where sales could take place, bars, breweries, and restaurants added THC beverages to their menus alongside alcohol, an option found in few places across the United States.[18]

The limited breadth of the medical cannabis program, coupled with nearly a year of minimally regulated hemp-derived THC product sales, left Minnesota in a unique situation regarding full cannabis legalization. Most states lean into their medical cannabis infrastructure and develop an enforcement agency before legalization takes effect.[19] When debating its cannabis legalization earlier this year, however, Minnesota still only had fifteen medical cannabis dispensaries across the state,[20] yet hundreds or even thousands of establishments already sold THC edibles and beverages.[21] Legislators were forced to answer urgent, unprecedented questions, such as how to regulate THC beverage service in bars and restaurants alongside the multi-year legalization. As cannabis acceptance and popularity grows in the U.S., including interest in THC beverages, other states will be watching Minnesota’s approach.[22]

II. THE FIVE-HOUR RULE

Although recreational cannabis sales are not expected to begin in Minnesota until early 2025—except on tribal land[23]—sales of hemp-derived edible products are still permitted within the limits set in 2022.[24] Eventually, the new Office of Cannabis Management (“OCM”) will handle regulation of the hemp-derived products.[25] In the meantime, legislators included provisions addressing some of the concerns in the hemp-derived THC market.[26] One provision prohibits “lower-potency hemp edible retailer[s] with an on-site consumption endorsement” from “sell[ing] lower-potency hemp edibles to a customer who the lower-potency hemp edible retailer knows or reasonably should know is intoxicated or has consumed alcohol within the previous five hours . . . .”[27] Enforcement will be carried out by OCM, and penalties will range from fines to license suspension, nonrenewal, or revocation.[28]

The prohibition on serving THC products to an individual who has consumed alcohol within the last five hours does not go into effect until 2025—the same time the new agency and its enforcement power begins.[29] Still, media coverage misstating that the provision would be effective in 2023 sparked concern in the restaurant industry.[30] Business owners cite concerns over insurance coverage,[31] liability in the hands of bartenders,[32] and other general practicalities.[33]

On the other hand, one of the primary sponsors of Minnesota’s cannabis legalization bill, Representative Zack Stephenson, describes the problems the provision attempts to solve.[34] One concern is the potentially intensified effects of alcohol and THC when consumed together, particularly in the context of one’s ability to operate a vehicle.[35] New users of THC products may not be familiar with dosage amounts written in milligrams and may not understand the effects of each dose.[36] Additionally, the supply and demand in THC products is increasing more rapidly than scientific understanding of the products’ health impacts.[37] Although there are valid concerns about responsible use of a new intoxicating product that is skyrocketing in sales and being introduced for on-site consumption, the five-hour rule is not the most practical way to incentivize it.

III. MOVING FORWARD WITH A FAMILIAR STANDARD

The Minnesota legislature should reconsider the standard they set for responsible service of THC products at bars and restaurants before it takes effect. The five-hour rule prohibits serving THC products in two scenarios: when the server “knows or reasonably should know” that (1) the customer is “intoxicated,” or (2) the customer “has consumed alcohol within the previous five hours.”[38] The inclusion of the five-hour rule in addition to intoxication indicates it is a separate standard. Nonetheless, the five-hour rule seems redundant. There are few circumstances, beyond signs of intoxication, in which a server would be aware of a customer’s prior consumption of alcohol.[39]

If the law’s purpose is to prevent establishments from serving alcohol and THC concurrently to the same customers, the rule should explicitly prohibit it. If, however, the goal is to reduce concurrent consumption of alcohol and THC more generally, as Rep. Stephenson indicated, the five-hour rule fails to set a workable standard.[40] The law as written extends an establishment’s responsibility to customers’ off-site conduct without a means, other than visible intoxication, of determining whether the conduct has taken place. Servers will be left guessing what someone may have consumed hours before they entered the establishment. Functionally, bars and restaurants will likely resort to prohibiting concurrent consumption on site and avoiding serving intoxicated customers.[41] Although that may meet legislators’ goals in practice, it leaves a gap in compliance by ignoring customers’ potential prior consumption. The law lacks the precision needed to allow businesses to plan for full compliance.

Instead of a timeframe standard, Minnesota should rely on a standard well-known to bar and restaurant employees. THC service regulation should rely solely on the “intoxicated” standard already written into the cannabis law, which mirrors alcohol service regulation.[42]  The overarching concerns that the five-hour rule seeks to abate are not significantly different from concerns about overserving alcohol.[43] Civil liability is also difficult to establish for overserving alcohol through dramshop laws.[44] These similarities of consequences and liability lend themselves to a similar enforcement structure. The “intoxicated” standard focuses on visible indicators that servers can be trained to notice. Standing alone, it would prevent service to customers who have already consumed too much alcohol or THC. Although there are additional challenges created by on-site recreational THC consumption,[45] those are better addressed separately and explicitly. Ultimately, a simplified and enforceable standard for THC beverage service will set a better model for other states to follow.

 

[1] Act of May 30, 2023, ch. 63, 2023 Minn. Laws 2685. This session law originated as House File 100. H.F. 100, 93d Leg., 2023 Reg. Sess., 2023 Minn. Laws 2685.

[2] Sourasis Bose, U.S. Sates Where Recreational Marijuana Is Legal, Reuters (June 1, 2023), https://www.reuters.com/world/us/us-states-where-recreational-marijuana-is-legal-2023-05-31 [https://perma.cc/8YLJ-TRUQ].

[3] See infra Part II (highlighting the challenges created by Minnesota’s previous partial cannabis legalization and restrictive medical cannabis program).

[4] See Minn. Stat. §151.72 (2022) (permitting the sale of edible “cannabinoids derived from hemp” containing less than 5mg of THC per serving); Todd Nelson, Legal Questions Persist as THC Products Spread in Minnesota, Minn. Law. (Nov. 3, 2022), https://minnlawyer.com/2022/11/03/legal-questions-persist-as-thc-products-spread-in-minnesota [https://perma.cc/GG2E-H9RD] (describing the lack of enforcement funding, licensing requirements, and manufacturing regulations after the enactment of  Minn. Stat. §151.72 (2022)). For an explanation of the difference between hemp-derived Delta-9 THC and other forms of cannabis, see generally Keenan Osborne, Growing Industry: The 2018 Farm Bill and Delta-8 Thc Legalization, 22 Wake Forest J. Bus. & Intell. Prop. L. 428 (2022).

[5] See Law Legalizes Adult-Use Cannabis, Expunges Prior Low-Level Cannabis Convictions, Minn. House of Representatives, https://www.house.mn.gov/NewLaws/story/2023/5516 [https://perma.cc/2HLW-D7EE].

[6] See Act of May 30, 2023, ch. 63, § 46 subdiv. 8(h)(1), 2023 Minn. Laws 2685, 2760 (“[A] lower-potency hemp edible retailer with an​ on-site consumption endorsement may not . . . sell lower-potency hemp edibles to a customer who the lower-potency hemp edible retailer knows​ or reasonably should know is intoxicated or has consumed alcohol within the previous five hours.”).

[7] See Medical Cannabis Program Key Dates, Minn. Dep’t of Health (July 21, 2023), https://www.health.state.mn.us/people/cannabis/about/timeline.html [https://perma.cc/LW44-4B3N] (noting that medical cannabis was legalized in 2014 and took effect in 2015).

[8] See Peter Callaghan, New Rules for Medical Marijuana in Minnesota Could End Up Quadrupling Number of Patients in Program, MinnPost (Oct. 15, 2021), https://www.minnpost.com/state-government/2021/10/new-rules-for-minnesotas-medical-marijuana-program-could-end-up-quadrupling-number-of-patients-in-program [https://perma.cc/HF8M-AMC3] (“Initially, only two growers, only eight dispensaries and a handful of medical conditions were included in the program. Minnesota was also the only state at the time that didn’t allow smoking of dried marijuana.”).

[9] Shawn Hauser & Vincente Sederberg, Hemp and Hemp-Derived Cannabinoid Issues, in Mass. Cannabis L. Manual § 7.7.1 (Adam D. Fine & Vincente Sederberg, eds., 2d ed. 2023).

[10] See Kaitlin Sullivan, The U.S. Has a Chance to Regulate Delta-8 THC. Will It?, NBC News (Sept. 5, 2023), https://www.nbcnews.com/health/health-news/delta-8-thc-regulation-loophole-may-make-hard-know-cannabis-products-rcna102961 [https://perma.cc/5GD3-EDFW] (“[T]he U.S. inadvertently created a way for retailers to legally sell a compound called delta-8 THC . . . .”). There are some remaining questions whether hemp-derived THC edibles and beverages are federally legal because the FDA has not approved the addition of THC (a drug within their authority to regulate) to food products. See Sharon Lindan Mayl & Douglas C. Throckmorton, FDA Role in Regulation of Cannabis Products, U.S. Food & Drug Admin. (Feb. 2019), https://www.fda.gov/media/128156/download [https://perma.cc/CVV2-FU4Y] (“CBD and THC cannot be added to foods under the [Food, Drug, and Cosmetic] Act regardless of whether the substances are hemp-derived.”).

[11] See Hauser & Sederberg, supra note 9, §7.7.4 (“[S]tates, U.S. territories, and Indian tribes are not required to authorize the production or sale of hemp or hemp products, and jurisdictions are afforded the express authority to adopt hemp regulations that are more stringent than federal regulations.”).

[12] At the time the 2014 Farm Bill passed and laid groundwork for cannabis de-scheduling in the 2018 Farm Bill, only Delta-9 THC existed. Many states only explicitly outlawed Delta-9. Norman Birenbaum et al., Hemp-Derived Cannabinoids—Delta-8 THC and Other Cannabinoids, in Cannabis L. Deskbook § 25:10 (2023–24 ed.).

[13] See Birenbaum, supra note 12 (summarizing the loopholes in the 2018 Farm Bill and the resulting minimally regulated market).

[14] Ellen Finn & Chris Farrell, Clearing up Confusion About Minnesota’s Newest Legalized THC Edible, Minn. Pub. Radio (July 6, 2022), https://www.mprnews.org/episode/2022/07/06/clearing-up-confusion-about-minnesotas-newest-legalized-thc-edible [https://perma.cc/L6QC-BA9U] (“The key thing about this law this year, is I think it provides consumers access to a safe product that is now legal.”). But see Adrianne DeLuca, The Wild West of Weed Drinks: Minnesota Makes a Case for Easy Access Cannabis, Bevnet Mag. (Apr. 7, 2023), https://www.bevnet.com/magazine/issue/2023/the-wild-west-of-drinks-minnesota-makes-a-case-for-easy-access-cannabis [https://perma.cc/BY9L-E8B5] (“[T]his model was specifically designed to force [cannabis] legalization in Minnesota. That’s it. If anybody tells you otherwise they are probably lying.” (internal quotations omitted)).

[15] The entire statute laying out the low-potency edible THC legalization is only four pages. Minn. Stat. § 151.72 (2022).

[16] Chris Casacchia, Minnesota’s Low-Dose THC Beverage Market Is Booming, MJBiz Daily (Aug. 4, 2023), https://mjbizdaily.com/minnesota-low-dose-thc-beverage-market-is-booming [https://perma.cc/K99S-VF92].

[17] Id.

[18] See Nelson, supra note 4 (“There might be some local city ordinances that prevent such, but under Minnesota law there are many bars in Minneapolis that are selling THC-infused drinks, and that’s not allowed in any other state. Most other states you have to go to a big dispensary to get any kind of THC products.”). But cf. Eric Berger, What Looks Like Pot, Acts Like Pot but Is Legal Nearly Everywhere? Hemp-derived Delta-9 THC, Health News Fla. (Nov. 1, 2022),  https://health.wusf.usf.edu/health-news-florida/2022-11-01/what-looks-like-pot-acts-like-pot-but-is-legal-nearly-everywhere-hemp-derived-delta-9-thc [https://perma.cc/N6D4-GPH2] (discussing a St. Louis bar owner’s choice to sell THC beverages).

[19] See Daniel G. Orenstein & Stanton A. Glantz, Cannabis Legalization in State Legislatures: Public Health Opportunity and Risk, 103 Marq. L. Rev. 1313, 1325 (2020) (“As of July 2019, successful recreational cannabis initiatives had developed exclusively in the context of existing medical legalization frameworks.”).

[20] Medical Cannabis Dispensary Locations, Minn. Dep’t of Health (Apr. 17, 2023), https://www.health.state.mn.us/people/cannabis/patients/locations.html [https://perma.cc/L6QU-Z4R6].

[21] See Peter Callaghan, Most Hemp Edibles, Beverages Still Legal Under Minnesota Marijuana Law, but with Higher Taxes and New Testing, MinnPost (June 6, 2023), https://www.minnpost.com/state-government/2023/06/most-hemp-edibles-beverages-still-legal-under-minnesota-marijuana-law-but-with-higher-taxes-and-new-testing [https://perma.cc/AAJ3-C3SX] (estimating about five thousand retailers were selling the hemp-derived THC products despite minimal information due to the lack of licensing requirements before October 1, 2023).

[22] Matt DeLong, Ryan Faircloth & Brooks Johnson, What You Need to Know About Minnesota’s Marijuana Legalization Law, Star Trib. (Aug. 9, 2023), https://www.startribune.com/minnesota-marijuana-legalization-bill-law-cannabis-cultivation-dispensaries-business-pot-weed-legal/600275325 [https://perma.cc/UA7S-NCNQ] (“The existing market for hemp-derived THC food and drink will be allowed to continue as long as businesses register with the Minnesota Department of Health by Oct. 1[, 2023].”).

[23] Id.

[24] Id.

[25] See Act of May 30, 2023, ch. 63, art. 1, § 2, subdiv. 2, 2023 Minn. Laws 2685, 2696–97 (outlining the Office of Cannabis Management’s powers and duties).

[26] See, e.g., id. § 45, subdiv. 7, at 2698 (prohibiting sales of “lower-potency hemp edibles” to individuals younger than twenty-one, sales through vending machines, and free samples).

[27] Id. § 46 subdiv. 8(h)(1), at 2760.

[28] Id. §§ 19, 21.

[29] Peter Callaghan, Can You Drink Both Alcohol and THC at Minnesota Bars? Despite Confusion over Marijuana Law, ‘Crossfading’ Is Legal for Now, MinnPost (Sept. 29, 2023), https://www.minnpost.com/state-government/2023/09/can-you-drink-both-alcohol-and-thc-at-minnesota-bars-despite-confusion-over-marijuana-law-crossfading-is-legal-for-now [https://perma.cc/TQM9-646P].

[30] See, e.g., id. (“But media reports raised the specter that the [five hour] rule was already in place . . . .”). Some businesses are already operating as if the law is in effect. E.g., Taproom, Fulton, https://www.fultonbeer.com/tap-room [https://perma.cc/GZ5U-7HSH] (imposing a wristband system to indicate whether patrons are drinking alcohol or THC beverages).

[31] E.g., Tony Chesak, Cannabis Law – What Retailers Need to Know, Minn. Licensed Beverage Ass’n (May 30, 2023), https://www.mlba.com/cannabis-law-what-retailers-need-to-know [https://perma.cc/8FH7-A2VH] (“If you can find the [cannabis liability] coverage, I have been hearing that it is very expensive and I have also heard that current liability coverage companies are being very strict with their clients as far as how these new products could affect your current coverages.”).

[32] See Dana Ferguson, New Minnesota Marijuana Law Could Force Menu Choice: THC or Booze, but Not Both, Minn. Pub. Radio (Aug. 3, 2023), https://www.mprnews.org/story/2023/08/03/new-minnesota-marijuana-law-forces-menu-choice-thc-or-booze-but-not-both [https://perma.cc/66U9-BEGV] (“[B]artenders and servers will be on the line to decide whether they can serve THC products without putting customers or their businesses at risk.”).

[33] See Callaghan, supra note 29 (describing businesses’ concerns about knowing what a customer has consumed before entering their premises).

[34] See id. (quoting Rep. Zack Stephenson).

[35] See id. (“‘We were trying to solve a problem, which is that there is pretty good evidence that the effects of THC and alcohol together are much stronger than either individually,’ [Minnesota House Representative] Stephenson told the forum.”).

[36] See Dani Blum, Weed Drinks Are a Buzzy Alcohol Substitute. But Are They Safe?, N.Y. Times (Aug. 24, 2022), https://www.nytimes.com/2022/08/19/well/eat/weed-cannabis-drinks.html [https://perma.cc/D5PJ-PKXL] (explaining the range of THC dosage and the general public’s unfamiliarity with the measurement).

[37] Id.; see also Jonah Kaplan, “Take It Low and Slow”: Why ER Docs Are Concerned About Growing Buzz from THC Drinks, CBS News Minn. (June 22, 2023), https://www.cbsnews.com/minnesota/news/take-it-low-and-slow-why-er-docs-are-concerned-about-growing-buzz-from-thc-drinks [https://perma.cc/W3C7-3VHZ] (detailing medical providers’ concerns about THC overdoses in Minnesota).

[38] Act of May 30, 2023, ch. 63, § 46 subdiv. 8(h)(1), 2023 Minn. Laws 2685, 2760.

[39] See Callaghan, supra note 29 (“The more I think about it, the only way to know if someone is lying about having drunk in the past five hours is … you guessed it. If they are acting intoxicated.” (internal quotations omitted)).

[40] See supra note 34.

[41] E.g., Callaghan, supra note 29 (quoting Bob Galligan, the legislative director of the Minnesota Craft Brewers Guild, saying the five-hour rule simply “puts the cart before the horse” in determining if someone is intoxicated).

[42] Cf. Minn. Stat. § 340A.502 (2022) (“No person may sell, give, furnish, or in any way procure for another alcoholic beverages for the use of an obviously intoxicated person.”).

[43] Compare Steve Olson & Dean R. Gerstein, Alcohol in America: Taking Action to Prevent Abuse 63 (1985) (“[P]eople who have been drinking in public establishments tend to make up a large fraction of drunk drivers.”), with Callaghan, supra note 29 (“[H]e was particularly concerned with how it could affect someone’s ability to safely drive a vehicle.”).

[44] See Olson & Gerstein, supra note 43, at 62 (“Despite their solid legal standing, dramshop laws have been difficult to apply. A commercial server can be held liable only if he or she sold alcohol to an underage or “obviously intoxicated” person.”).

[45] See supra notes 34–37 and accompanying text (listing concerns about THC beverage service).