A Denver Democrat decided on Tuesday to pull a proposal that would have allowed beverages with tetrahydrocannabinol or THC to be sold at locations like grocery stores, restaurants, and entertainment venues.

THC is the psychoactive substance in cannabis, the chemical that gives people a high.

Senate Bill 164 would have established a regulatory framework for the manufacture, distribution, sale, and consumption of THC beverages, which are infused with the psychoactive compound found in the cannabis plant and have an intoxicating effect.

Colorado already allows for the sale of hemp beverages with up to 1.75 milligrams of THC to be sold in liquor stores. Senate Bill 164 would have increased that cap to 10 milligrams and allowed THC beverages to be sold wherever alcohol is legally available.

Both Minnesota and Tennessee allow for the sale of THC beverages for on-premises consumption, according to Sen. Julie Gonzales, D-Denver.

Additionally, the bill would have directed the Colorado Department of Public Health and Environment to adopt rules on labeling, packaging, and consumer notice requirements for THC beverages and to set licensing requirements.

Supporters defended the proposal as establishing a “clear and responsible regulatory framework” for their sale, while critics said they worry about adding another intoxicating product that could end up in the hands of children.

Opponents: Bill is ‘fundamentally a giveaway to out-of-state hemp companies‘

Dawn Reinfeld of the youth advocacy organization Blue Rising expressed worries about the ease with which children could get their hands on THC beverages if they’re sold at places like restaurants and grocery stores.

“We hear from parents that it is easy to walk into a grocery store and stroll out with alcohol, so why would these intoxicating THC substances be any different?” she asked.

State law prohibits alcohol from being sold with marijuana products, and Reinfeld argued THC beverages should be regulated the same way.

Young people are already being subjected to “misinformation” about marijuana, she added.

“To add into this toxic mix another intoxicating substance that is allowed to operate outside of the regulated marijuana market will compound this issue,” she said.

Representatives from the marijuana industry also expressed concerns about the legislation.

Adam Foster of the Responsible Cannabis Coalition called the measure a “ploy” by out-of-state hemp companies to sell intoxicating THC products in Colorado, while avoiding the state’s regulations and taxes on the marijuana industry.

“We ask that you stick with the common-sense idea that all intoxicating THC products should be regulated the same under Colorado law,” Foster told the committee.

Supporters: THC beverages offer an opportunity to recover lost revenue

THC beverages do not compete with marijuana, said Christopher Lackner of the Hemp Beverage Alliance. If anything, they compete with alcohol, which is seeing record-low consumption rates, he said.

“They’re enjoyed like alcohol, they’re marketed and sold to 21-plus adults like alcohol, and the price point and experience is like alcohol,” Lackner said.

THC beverages provide a modern alternative to alcohol, said Paige Ross of Flying Kites, a THC beverage company based in Iowa.

As alcohol consumption hits a 90-year low and the state faces a financial deficit, THC beverages could provide a new revenue source for Colorado, Ross said.

“By passing this bill, Colorado can supplement that declining tax base with a modern alternative,” Ross said.

The industry is asking to be regulated, Ross added.

“We are not asking for an advantage over marijuana. We would love a level playing field. We believe THC beverages, regardless of the source, be it hemp or marijuana, should be held to the same rigorous safety standards as any other adult product in Colorado,” Ross said.

Gonzales cited the “energy, momentum, and interest” in the policy over the past several months.

However, she didn’t feel she had the votes to pass the bill, she said, adding, “What is lacking here is not interest. What is lacking is not expertise. What is lacking is political will.”

The news came on the heels of public safety issues being raised in the marijuana industry. A Denver Gazette and ProPublica investigation in January reported that, despite Colorado becoming one of the first states to ban intoxicating hemp products made by chemical processing, the legislature and regulators failed to adopt many regulations that other states have employed to keep hemp products off marijuana dispensary shelves.

Creating the liquid distillate for vapes and edibles from hemp is much cheaper than using marijuana, giving companies a competitive advantage.

Regulators said they’re worried because manufacturers rely on toxic and potentially hazardous chemicals to convert the non-intoxicating compound CBD that is prevalent in hemp into THC, the psychoactive compound that makes people feel high. Regulators have banned such chemical synthesis because they say they fear chemical residues could remain in finished products, imperiling the public.

Colorado manufacturers have exploited the state’s regulatory gaps to continue using hemp to make THC distillate that goes in products marketed as marijuana, even though doing so is against state law, according to investigations by regulators, previous agency bulletins and testimony and lab test results contained in several lawsuits.

In 2024, state investigators found that one popular brand of marijuana vapes sold in dispensaries was actually derived from hemp, even though it was marketed and sold as coming from marijuana. Regulators found that the vapes were contaminated with methylene chloride, which is prohibited by Colorado’s marijuana regulators and banned for most uses by the U.S. Environmental Protection Agency because it can cause liver and lung cancer and damage the nervous, immune and reproductive systems. The chemical is often used to convert CBD from hemp into THC.

Denver Gazette Investigative Team Editor Christopher Osher contributed to this article.