We expect the 2026 legislative session to be shaped by a strong emphasis on affordability, as both parties lean into this messaging in advance of the midterm elections. At the same time, many states are confronting significant economic pressures driven by state budget deficits. These conditions may prompt renewed interest in excise tax increases, as legislators seek additional ways to address fiscal shortfalls.
Producer direct-to-consumer (DTC) shipping legislation, particularly for spirits, will be a contentious fight in at least 10 states in 2026. California passed another extension of the temporary COVID craft distiller shipping permission, and its expected DTC proponents will be back this year seeking a permanent shipping law there. No permanent spirits producer DTC legislation passed in 2025, and as a result we expect all spirits DTC legislation to this year. California, Hawaii, and Iowa will be states to watch.
Attempts by small producers to gain new or expanded direct paths to consumers will no doubt continue into the upcoming sessions, though the introduction rate will still be lower than during COVID. We anticipate an increase in self-distribution legislation as well as in bills providing new or greater sales privileges for small/craft/farm producers, especially distillers. However, we expect satellite location legislation to be introduced at the smaller rate seen in 2025.
As states consider ways to increase revenue, some may consider creating a legal definition and placing a tax on ready-to-drink products. Similarly, beer wholesalers may look to carve out a bigger marketplace with these products that are spirit-based – as was attempted by West Virginia in last year’s session. With all this in mind, we anticipate some growth in RTD legislation in 2026.
Intoxicating hemp legislation exploded in 2025 becoming a dynamic emerging issue. At the federal level, language included in a government funding package that reopened the government narrowed the definition of hemp established under the 2018 Farm Bill, effectively closing the so-called “hemp loophole” that had allowed certain intoxicating hemp products to be sold outside the traditional regulatory frameworks. Following that action, President Trump issued an executive order to reclassify marijuana from a Schedule I to a Schedule III drug, a category that includes ketamine and certain codeine-containing medications. While it is too early to know for certain how states will approach navigating this evolving policy landscape, we do not expect the issue to go away.
Delivery and to-go bill introduction peaked during the pandemic but have since slowed as a large majority of states have already passed these measures.
Sustainability legislation has garnered significant attention in years passed. While we expect introductory bills to continue, early conversations with legislators indicate a reduced interest in these policies as they can be inflationary and result in increased end costs for consumers.
If you have any questions on state legislation, please do not hesitate to reach out to the WSWA state affairs team Chelsea.Crucitti@wswa.org or Colin.Phillips@wswa.org.