The ban is part of a wide-ranging cannabis and hemp regulation bill signed by Gov. JB Pritzker in June. It requires hemp-derived THC products above a federal potency threshold to be sold only through state-licensed cannabis dispensaries and taxed like cannabis. The Illinois Healthy Alternatives Association and a group of hemp businesses filed an emergency motion Friday for a temporary restraining order, arguing the law is unconstitutional and would devastate thousands of Illinois farmers, infusers, distributors and retailers.

At Marz Community Brewing Co., hemp-derived THC beverages now account for nearly half of production at its McKinley Park headquarters and its Logan Square nanobrewery and taproom. The infused line includes low-dose and high-potency seltzers with names like Bong Water and High Tea.

“It truly rescued our business and allowed us to expand,” founder Ed Marszewski said. “We’re going to have to lay people off. We won’t have enough income to pay them.”

Marszewski said dispensaries, which are largely vertically integrated, have little shelf space for beverages and will not carry outside brands. Infused beverages typically account for about 1% of dispensary sales, according to industry data.

Hopewell Brewing Co. launched its lemon-lime Choom drink in 2024 and expanded into sparkling waters and teas. The Logan Square company is offering 50% off Choom products as it winds down inventory and also co-manufactures THC beverages for other brands.

“Our state legislators have missed the mark here, and this decision directly damages local craft businesses like ours,” said Jonathan Fritz, a partner at Hopewell. He noted Illinois businesses must exit the category a month before a federal deadline, putting them at a disadvantage against competitors in neighboring states.

Revolution Brewing, Chicago’s largest independent craft brewer, halted production of its Reverb THC line in the summer. Owner Josh Deth hopes Congress and Illinois lawmakers will allow distribution through licensed liquor establishments, a carve-out favored by alcohol suppliers, distributors and retailers.

“There’s clear customer demand for low-dosage THC beverages for both drinking at home and going out, and we’d love to keep innovating within the THC drink space if we are allowed to,” Deth said.

The state’s timetable mirrors federal guidelines set in President Donald Trump’s 2025 spending bill, which outlawed hemp potency limits beyond 0.4 milligrams of THC per container. The federal deadline was later extended to Dec. 11, but Illinois kept its November date.

Humboldt Park-based Perfectly Dosed makes THC emulsion ingredients for about 50 Illinois beverage brands, breweries and restaurants. Co-founder Glenn McElfresh said the company is planning to move some warehousing and fulfillment services out of state if restrictions are prolonged, and may build future capacity in Colorado, which has safe harbor laws.

“Because of the law, we can’t definitely say we’re going to build in Illinois,” McElfresh said. Perfectly Dosed still plans to apply for a new hemp product manufacturing license through the Illinois Department of Agriculture. Licenses require an application, an on-site inspection and a $5,000 fee. The department said it is accepting applications on a rolling basis with no deadline and is working with several applicants.

Venues are also complying. The United Center will stop offering beverages with hemp-derived THC as of Nov. 12, a spokesperson said. The Salt Shed will also comply, according to Sam Shechtman, senior manager of business development at 16 on Center, the venue’s parent company. Both venues were among the first major U.S. arenas and music venues to carry THC-infused drinks, in partnership with Green Thumb Industries.

“We look forward to future legislative changes that will establish a clear, regulated pathway for THC beverages to return to venues like Salt Shed,” Shechtman said.

Green Thumb’s Rythm subsidiary, which operates the Rise hemp dispensary at Salt Shed, reported this month that hemp-derived product sales rose 15% to $6.4 million in the third quarter. The company said legislative changes would prohibit it from selling current hemp-derived THC products in their existing form through retail and venue channels, including Riot Fest, the United Center and Navy Pier.

Some cannabis companies see an opportunity. Verano Holdings founder and CEO George Archos told analysts last month that Ohio’s regulated market saw total receipts rise 25% at the end of the third quarter versus the end of the first quarter after that state implemented a hemp ban in March, indicating consumers are shifting to licensed dispensaries.

In Chicago, excise taxes on cannabis purchases range from 22% to 37% depending on product potency, among the highest in the country, according to the Illinois Department of Revenue. Medical patients pay a reduced 1% sales tax.

At South Loop Market’s Logan Square location, owner Anas Masoud said hemp-derived THC beverages helped offset years of declining beer sales and now account for about 20% of sales in its wine and spirits department. He is stocking up on inventory while weighing other options, including CBD drinks or hemp-infused beverages that comply with new federal requirements.

“This is hurting all the small business owners,” Masoud said. “We’re still a small mom-and-pop retailer.”

A London-based research firm, Euromonitor International, estimated the hemp-based THC beverage market will grow to $4.1 billion by 2028, a 1,615% increase from $239 million in 2023.