Kentucky Committee Approves Bill to Tax and Tightly Regulate Intoxicating Hemp Products
- The Kentucky House Appropriations & Revenue Committee approved House Bill 9, aiming to overhaul regulations for intoxicating hemp products, kratom, and cannabis-infused beverages, with a 15-3 vote.
- The bill imposes new state fees starting July 1, 2027, including a retail regulatory fee of 1.6 cents per milligram of THC on hemp-derived cannabinoid products and cannabis-infused beverages, plus a 4% retail regulatory fee on gross receipts from alcoholic and cannabis-infused beverage sales.
- It defines cannabis-infused beverages as adult-use cannabinoid liquids with up to 5 milligrams of intoxicating cannabinoids per 12-ounce serving, excluding medicinal marijuana, hemp tinctures, and nonintoxicating cannabinoid products.
- The bill mandates stronger testing standards by requiring the Department for Public Health to approve independent labs for hemp product testing, with businesses mandated to use approved labs and re-register their cannabinoid products to continue sales in Kentucky.
A bill that would significantly reshape how Kentucky handles intoxicating hemp products was approved today by the House Appropriations & Revenue Committee. The vote was 15 to 3. House Bill 9 would create a new regulatory framework for hemp-derived cannabinoid products, kratom products and cannabis-infused beverages, while also imposing a series of new state fees beginning July 1, 2027.
The measure would place a retail regulatory fee on hemp-derived cannabinoid products set at 1.6 cents per milligram of delta-9 THC, delta-8 THC or any other form of tetrahydrocannabinol sold in the state. It would also create a separate wholesale regulatory fee for cannabis-infused beverages at the same 1.6-cent rate per milliliter or milligram of THC. In addition, the bill would impose a 4% retail regulatory fee on alcoholic beverage retailers for gross receipts derived from the sale of alcoholic beverages and cannabis-infused beverages.
The proposal defines a cannabis-infused beverage as an adult-use cannabinoid liquid product with intoxicating properties that contains no more than 5 milligrams of intoxicating cannabinoids per 12-ounce serving. It also makes clear that these products would not include medicinal marijuana regulated under Kentucky’s medical cannabis law, hemp tinctures, or products containing only nonintoxicating cannabinoids.
Beyond taxes and fees, the bill would require stronger testing standards for hemp-derived cannabinoid products. It directs the Department for Public Health to establish a proficiency testing system and an approval process for independent laboratories seeking to test registered hemp products sold in Kentucky. Once that approved lab list is in place, businesses would be required to use those labs and re-register previously registered cannabinoid products in order to keep selling them in the state.
During the committee’s hearing on the bill, a spokesperson for the company Cornbread Hemp said they support the bill, but they requested several changes including a reduction in fees and more standardization among product regulations. There was only one other speaker, a saloon owner who said he opposes the bill based on the bill establishing additional taxes for alcohol distributors.