In a rarity in Washington these days, bipartisan legislation has been introduced to address one of the fastest-growing sectors in consumer products: hemp-derived cannabinoids. Introduced by Representatives Andy Barr (R-Ky.) and Angie Craig (D-Minn.), the Lawful Hemp Protection Act would establish a federal regulatory framework for low-THC hemp products, replacing the patchwork of state laws that has developed since the 2018 Farm Bill legalized hemp.

At first glance, the proposal may appear reasonable. It would create a three-tier distribution system for hemp beverages modeled after the alcohol industry and prohibit vertical integration by requiring producers, distributors, and retailers to remain separate businesses. It would also impose new federal taxes on hemp products.

For many in the alcohol industry, that may sound like a victory. If alcohol operates under a three-tier system, why shouldn’t hemp?

As Led Zeppelin famously sang, “all that glitters is not gold.”

The reality is that the alcohol distribution system is under tremendous strain. The well-known distribution bottleneck has left thousands of small suppliers struggling to obtain meaningful wholesaler representation. Distributors increasingly concentrate on high-volume brands while smaller producers are left without a viable route to market. The financial collapse of RNDC has only exacerbated these problems, leaving suppliers unpaid and further reducing distribution capacity.

Rather than addressing those structural problems, this legislation would make them worse.

Adding hemp beverages to an already overcrowded wholesale portfolio means distributors will inevitably devote shelf space, sales attention, and warehouse capacity to the industry’s newest high-growth category. Those resources have to come from somewhere, and the losers will almost certainly be smaller spirits, wine, and beer suppliers who are already fighting for distributor attention.

Congress is effectively proposing to load more passengers onto a ship that is already taking on water.

For many small alcohol suppliers—particularly those prohibited by state law from self-distributing or shipping directly to consumers—the wholesale tier represents their only legal path to market. If wholesalers increasingly prioritize hemp products, many existing alcohol brands will simply lose access to distribution altogether.

One would think Representative Barr, whose home state is synonymous with bourbon, would appreciate the consequences. Kentucky’s independent distillers have spent years battling distribution challenges of their own. This legislation risks making those challenges even greater.

There is another reason the alcohol industry should oppose importing the three-tier system into hemp.

For years, the hemp industry has largely operated outside the traditional alcohol distribution model. While improvements in product standards and age verification are certainly warranted, there is little evidence that requiring a mandatory wholesale middle tier is necessary to protect public safety. The principal regulatory concern is preventing youth access—a goal that can be achieved through licensing, testing requirements, age restrictions, and meaningful enforcement against retailers that violate the law.

Wholesalers are not law enforcement agencies. They do not check IDs. They do not prosecute illegal sales. Their existence does not inherently improve public safety.

Instead, Congress is using hemp regulation as an opportunity to expand one of the most protectionist distribution systems in American commerce.

The alcohol industry should think carefully before supporting this approach.

If hemp is successfully regulated without requiring a mandatory wholesale middleman, it will provide policymakers with a real-world comparison to the alcohol industry. It will demonstrate that effective regulation can exist without legally mandated intermediaries. That type of competition in regulatory models should be welcomed—not suppressed.

Rather than exporting the burdens of the alcohol system to another industry, lawmakers should be asking whether those burdens remain justified in alcohol itself.

The liquor industry should embrace competition, innovation, and consumer choice—not seek to impose its own regulatory constraints on an emerging market. Without that shift in thinking, the reforms the alcohol marketplace desperately needs will never come.