Challenges That THC Beverages Present to the Hospitality Industry
As consumer preferences shift, bars and restaurants have more to consider ─ especially with the rise in THC beverages.
Even if you live in a state where marijuana is illegal, hemp beverages fall under federal hemp laws rather than state cannabis regulations, allowing them to be sold through mainstream retail outlets that typically carry alcohol.
This is resulting in cannabis-infused beverages popping up on shelves nationwide. It’s such a hot topic that an industry group of American alcohol retailers issued a policy memo calling for cannabis products to be sold in licensed liquor establishments only.
The reason for the policy? There are significant liability concerns that come along with selling these products.
THC Beverages Affects Consumers Differently Than Alcohol
According to Charles Pyfrom, CMO of CannGen Insurance Services, selling customers alcohol and THC beverages in the same service establishment comes with some liability concerns.
“Bar owners may be experienced in liquor risks but often misunderstand cannabis beverage risks, as they offer different potential issues,” he says. “Both substances impair judgment and when combined, they can amplify effects of both substances unpredictably.”
Many people who try THC beverages may not be experienced enough with cannabis to know how it will affect them. This raises the risk of overconsumption, adverse reactions or potential liability exposure for businesses, according to Pyfrom.
“The risk becomes higher if a patron becomes injured or causes any harm to others,” he explains. “From an insurance standpoint, both alcohol and THC are high risk, and when establishments offer both, this can cause underwriting red flags, because it blurs lines of accountability in claims that are related to intoxication or injury.”
Protecting Your Customers and Your Business
For bars and restaurants that do want to start offering THC beverages in states where it’s legal, Pyfrom advises owners to fully understand the regulations and be prepared to meet compliance requirements.
“Making sure your staff is trained to educate consumers is crucial,” he says. “It’s also very expensive to remain compliant. There are high startup costs and higher insurance requirements.”
Cannabis products like THC beverages, whether regulated adult-use cannabis in legal states or hemp-derived THC drinks which are subject to far less regulations and often exist in a legal grey area, force businesses to decode a patchwork of state laws.
“Insurers must take this legal grey area into account and look closely at how a product is sourced, labeled, stored and sold, especially in high-traffic environments like bars and restaurants,” says Pyfrom. “A major factor is compliance, and operators who are following state regulations, adhere to stringent lab testing requirements and follow packaging standards are more likely to be protected.”
Businesses looking to serve THC beverage to meet customer demand have quite a bit to consider. More than anything, patrons need to be safe and be fully aware of what they’re consuming. If you take the proper precautions, offering these alcohol alternatives may very well benefit your business.
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