The Unlikely Disruptor: How C-Stores Are Reshaping Cannabis Industry Risk

C-Stores have long been seen as the bane of the regulated cannabis industry, pushing unregulated cannabinoid products on customers who don’t know better. And there certainly is reason for caution when dealing with cannabis products that are not tested or verified, and very often mislabeled. Additionally, C-stores have been seen as pushing cannabis products on minors, which presents a threat to the industry as a whole.

The SXSW Counter-Narrative

But perhaps this view is short-sighted. There is reason to be cautious about C-store cannabis products, but there is also a good case to be made for acceptance, namely that C-stores have unexpectedly become major accelerators towards mainstream acceptance of cannabis. When you can buy weed alongside a gallon of gas and a bag of Doritos, there’s less fear around cannabis as a whole. And clearly, C-store cannabis products aren’t going anywhere.

So the question, as presented at SXSW 2025, becomes, how can C-stores increase cannabis accessibility while not flaunting regulations that constrict legal cannabis businesses, and mitigating product risk?

Historically, C-Stores have invited valid criticisms of their business model; they push unregulated cannabis products, typically shipped in from out of state, that don’t undergo the same third-party testing. This opens consumers up to risks like heavy metals and residual solvents, which present health risks.

But C-Stores have also been guilty of carrying mislabeled products, misrepresenting how potent a product is, and the cannabinoids contained. Some products tested have even been found not to contain a single cannabinoid they promise, like D8 or D9 THC, instead containing lab-created franken-cannabinoids. These unregulated cannabinoids create unpredictable effects, a risk to consumer safety, and the reputation of the cannabis industry.

From the regulated industry, C-Stores are often seen as the wild west of cannabis, providing unregulated, untested products to unknowing people. The risks in doing this are huge and threaten the stability of the overall cannabis industry. Operators who spend most of their days in compliance are rightfully bitter.

If the past few years have proven anything, it’s that, for better or worse, C-stores selling hemp and cannabis products aren’t going anywhere.

This pervasiveness has begun to raise a question, presented at a panel at SXSW this year: are C-stores the “unlikely accelerators of the cannabis industry’s march toward mainstream acceptance”?

The answer seems to be, for better or worse, yes. Convenience stores attached to gas stations are everywhere, from major cities to the smallest, one-road towns. They are ubiquitous across the country and a necessary part of most Americans’ lives. C-stores carrying hemp and cannabis products are an instant boost to normalization because of how normal C-stores are. Even people who would never step foot in a dispensary are likely to be at the gas station from time to time, and perhaps they would never smoke THC, but a CBD product may help their pain, anxiety, or sleep issues.

But acceleration comes with risk; going faster isn’t inherently a good thing. This normalization comes at the cost of formalization. While C-stores are normalizing buying cannabis products, the products sold here often lack the formal testing for products required in the regulated industry.

Cannabinoids like D8 and HHC are still psychoactive, and can cause unpredictable experiences that could be avoided with proper testing and dosage recommendations—but convenience store retailers can’t speak to how much CBD the average person would need. This puts staff in an awkward position as retailers navigate product sales in a category of which they have no understanding.

Anyone trying such products deserves accurate recommendations to help create a positive first experience, and C-store products can be a gamble. Additionally, many of these products have been shown to contain potentially harmful compounds, like heavy metals.

Effective risk mitigation requires understanding the three core vulnerabilities that define cannabis liability.

Operational Risk: Age Verification

Dispensaries have at least one level of age-verification, and in states like California and Massachusetts, it’s as many as three points of verification. Convenience store staff are typically minimum wage employees without the same level of training on hemp and cannabis regulations, which leads to an increased risk of underage kids accessing psychoactive cannabis products. Not only is this a major operational risk for C-stores, it can lead to bigger issues on the state level, even resulting in bans on sales of any hemp products.

Product Risk: Potency and Purity

The hemp industry is nationally governed, but it lacks standardized testing procedures for hemp and synthetic cannabinoids. This gap in oversight allows bad actors to proliferate, selling untested franken-cannabinoids, mislabeling potency, and even purposefully targeting children. This opens the door to consumers potentially ingesting contaminants like heavy metals or significantly higher doses than intended. Some people have even landed in the hospital after consuming intoxicating hemp products.

Case in point: the ongoing STIIIZY lawsuit was filed as a result of mislabeled products with higher potency, and teenagers ending up in the hospital.

Legal and Legislative Risk

Acceleration isn’t always a good thing. Many hemp products are sold in a legal grey zone, with intoxicating cannabinoids like Delta-8, sold in states without legal cannabis markets, like Nebraska and Texas. This has led to an outcry against hemp products as a whole and calls to ban any and all sales of hemp products. The Harris Amendment, at the federal level, would eliminate a vast majority of the hemp sold in C-stores around the country, a move that would decimate the hemp industry and reduce access for millions of consumers.

Some states have already gone this far, while others have taken action against specific cannabinoids like D8 THC. Non-compliance puts hemp sales at risk for the entire convenience store industry.

The answer is not to put the genie back in the bottle. It’s for convenience retailers to lean into identification for hemp products the same way they do for alcohol and continue to accelerate the normalization of cannabis products.

Self-Regulation and GMPs

To be compliant with federal regulations and uphold the compliant side of the hemp industry, C-stores carrying hemp and cannabis products must treat selling and ID-ing patrons as seriously as alcohol compliance. Consumer safety must be at the forefront of the acceleration to keep public goodwill turned towards cannabis.

It has taken many years to get beyond the idea of cannabis as a gateway drug or something incredibly dangerous, but unregulated access to intoxicating hemp products threatens to undo all of that. If C-Stores are positioning hemp or marijuana as an adult beverage alternative, they must use the same level of age verification.

But to uphold the hemp industry, C-stores need to go further, with stricter internal controls. Compliance with regulations is one thing, voluntary adherence to Good Manufacturing Practices (GMPs) is another. C-store cannabis products, like those sold in dispensaries, should come with COAs from third-party testers for every batch and transparent QR code tracking.

Industry Best Practices

The Farm Act loophole created the hemp industry—but its reliance on labeling products as “less than 0.3% THC as per federal law” may be its undoing. Hemp products, like cannabis products, need accurate, transparent labeling and dosing information. Even non-intoxicating cannabinoids like CBD can have negative effects, and people must be adequately informed about what they’re consuming to make educated decisions.

Hemp products must also aim higher, with packaging that is not intentionally designed to draw in underage consumers or mimic recognizable snack brands. This includes playing off the names of candies or designing packaging to use recognizable cartoon characters.

Market Differentiation

The hemp industry can often seem like the wild west, but over time, the cream rises to the top. High-quality, long-lasting hemp brands will be those putting compliance, labeling, and testing to differentiate themselves from a sea of similar-seeming products. Some hemp brands may even go so far as to remove their distribution from C-stores to further separate themselves from lower-tier offerings and bad actors.

The rising tide of hemp seems unstoppable; beverages are being sold alongside alcohol in grocery stores and C-stores in several states. As hemp becomes more widely available to Americans, they will look for it more. Over time, the trustworthy, reliable brands will gain a strong customer base and eventually, the calls for wider retail distribution will become impossible to ignore, at which point you can expect to see hemp integrated alongside other popular CPG products.

A hemp aisle next to the alcohol aisle? Expect to see it.

However, there’s been a major, breaking development for both the hemp and regulated cannabis industries. The legislation, included in a federal appropriations bill and signed by President Donald Trump on November 12, 2025, effectively bans the vast majority of intoxicating hemp-derived products nationwide. We’ll keep you updated on these developments.

Risk Management Outlook

While C-stores are undeniably acting as an accelerator for hemp products, the only way for these stores to remain a viable distribution channel is through sweeping reform. Acceleration without rules or guidelines is a recipe for disaster, particularly with intoxicating hemp products.

Without serious internal reform, more government agencies on the state and federal levels will likely get involved and crack down on bad actors in the name of consumer safety. Only the hemp brands that are proactively compliant will survive this.

C-stores have long been the bane of the legal cannabis industry, but their impact on normalization and acceleration of consumer hemp expectations can’t be overstated. In this way, C-stores are both a major player in the hemp industry and its single biggest risk factor. C-stores’ status as an unlikely disruptor in its current form will only survive as long as the regulatory grey area around hemp exists, and the faster the industry moves, the more likely it becomes that this golden opportunity of grey area will end.

For the hemp industry, C-stores are not a threat to be ignored or buried; they’re indicative of a transformative market shift that is coming, and must be managed through proactive legal and regulatory compliance. The hemp industry has a big, beautiful future—as long as it can survive long enough to get there. C-stores may accelerate access to hemp, but doing so without product integrity is a recipe for crash and burn.

Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by email [email protected] or calling 646-854-1093 for a customized letter or learning more about your cannabis insurance options.