After banning hemp products that contain THC and other intoxicating compounds, California regulators are starting to crack down — catching some retailers by surprise and upending the lucrative market for cannabis-adjacent drinks and gummies.
A dark-haired man in a worn flannel coat walked into a Dino Mart convenience store on a busy street in North Hollywood one recent weekday afternoon. He perused the shelves before landing on a mini-fridge stocked with colorful cans near the chip aisle. As he purchased a drink and walked back out of the shop, Esmeralda Reynoso, a supervising agent in charge with the California Department of Alcoholic Beverage Control, looked on through the windshield of her unmarked sedan parked outside.
'I’d also like to acknowledge the outstanding work of our team in getting word out to our licensees prior to us engaging in enforcement efforts.” Ajay Narain, chief executive of Beacon Beverages, which specializes in mocktails infused with hemp-derived THC and CBD, said the Bay Area-based company has experienced a 35% drop in revenue and laid off four employees since the regulations went into effect. “The loss has been significant and really demoralizing,” he said in an email.
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