Have you heard of watermelon seed milk? How about adaptogeninfused non-alcoholic gin? What about a CBD-infused beauty smoothie? These are not the future; they exist right now, and this is just the tip of the iceberg. The innovations in the food and beverage space are on another level and it shows no signs of slowing.
With the explosion of new and innovative foods has come regulations that lag far behind. Federal agencies like the Food and Drug Administration (FDA) and U.S. Department of Agriculture (USDA) along with state governments have had to adapt. They are adjusting to a wave of brands less focused on creating products that are competitive in the market and more focused on innovating beyond traditional food methods to meet the growing demand for healthier options. A recent McKinsey study estimates the spend on wellness products and services to be more than $450 billion in the United States and growing at more than 5% annually.1 So, what are these underfunded agencies to do in the face of this fast-moving wave? Try to catch up.
THE MAD SCIENCE OF LAB-GROWN MEAT
Meat grown in a lab sounds like something straight out of science fiction, but it is an absolute reality. The real question is, Would you eat it? There are companies on the cutting edge of this technology that believe you will. Their hopes are to make the meat so meat-like that you make the switch away from conventional meat altogether. I know, Texans and beef go together like Philly and cheesesteaks, but these lab-grown replicas are becoming so similar that you may not be able to tell the difference.
So, what exactly is it? Lab-grown meat, also known as cultivated or cell-cultured meat, refers to meat that is produced by cultivating animal cells in a controlled laboratory environment rather than through traditional animal farming and slaughter.2 While this innovation holds promise for sustainable food production, it has, as you can imagine, encountered various regulatory challenges in the U.S.
The FDA and the USDA currently share jurisdiction over cultivated meat. The FDA oversees the initial stages of production, including cell collection and growth under its food safety authority,3 while the USDA regulates the processing, labeling, and distribution of the final products.4
The area of cultured meat is still new from a regulatory perspective and thus, agencies are working to create a clear pathway to market. In November 2022, the FDA completed a pre-market consultation for UPSIDE Foods’ cultivated chicken, affirming its safety for consumption. Subsequently, in June 2023, the USDA granted UPSIDE Foods and GOOD Meat approval to produce and sell their cultivated chicken products in the U.S.5
At the state level, both Florida and Alabama passed laws banning the manufacture, sale, or distribution of cultivated meat within their borders. Florida’s law was justified by state officials as a measure to protect traditional cattle farming interests. Mississippi’s ban just passed in March 2025, making it the third state to do so.6
Many industry advocates argue that cultivated meat offers positive benefits, including reduced environmental impact and ethical considerations in meat production. They contend that bans on such products hinder innovation and consumer choice. Conversely, opponents have expressed concerns about health implications and the preservation of traditional agricultural practices. The coming years will likely see this push and pull continue.
THE RISE OF CANNABIS INNOVATIONS
Another sector that has continued to evolve and innovate is the cannabis food and beverage industry. With over half of all Americans living in states where cannabis is legal,7 it is no wonder the industry has taken off.
The tale of cannabis food and beverage regulation is directly linked with the tale of state versus federal government. At the federal level, the FDA has not approved the inclusion of THC (tetrahydrocannabinol) or CBD (cannabidiol) in food or beverages. This is for a few reasons. Most importantly, cannabis, including THC, remains classified as a Schedule I controlled substance under the Controlled Substances Act. This means it is considered to have a high potential for abuse and no accepted medical use at the federal level, making it difficult for the FDA to regulate cannabis-derived ingredients in foods. The 2018 Farm Bill legalized hemp-derived CBD (containing less than 0.3% THC) by exempting it from the definition of marijuana under the Controlled Substances Act, but THC- rich cannabis remains illegal federally.8
For CBD specifically, the ingredient cannot be used in foods because it was first used in an approved drug (Epidiolex) and therefore is currently precluded from being used as a food or supplement ingredient.9 Although the FDA has not actively pursued enforcement against all cannabis-infused products, it has taken action against those making unsubstantiated medical claims or containing unapproved ingredients through agency- issued warning letters.10
You may have read that last section and wondered, Then how is it that I see THC and CBD food and beverages in stores locally? Well, that is the concept of federalism where the federal government may not encroach on the legal authority of the state within its own borders. So, while cannabis remains illegal at the federal level, many states have passed laws to legalize both medical and recreational cannabis, including products like edibles, beverages, and CBD-infused foods.
The state of Texas legalized hemp-derived CBD products in June 2019 with the passage of House Bill 1325. This legislation aligned state law with the federal 2018 Farm Bill, permitting the production, manufacture, and sale of hemp and its derivatives, including CBD, as long as they contain 0.3% or less of THC by dry weight.11
However, the legal landscape for cannabis in Texas is experiencing a potential major revamping. In May 2025, Senate Bill 3 passed, banning all forms of consumable THC, including products containing delta-8 and delta-9 THC. This bill responds to concerns about unregulated, high-potency THC products flooding the market. The legislation would allow only CBD and cannabigerol (CBG) products to remain legal, subject to stricter oversight and licensing requirements. As of this writing, the bill is going to Gov. Greg Abbott’s desk.12
While the federal government remains cautious, states have been the driving force behind the industry’s expansion. The contention between state autonomy and federal restrictions creates a dynamic and sometimes confusing legal landscape. The key for brands will be navigating this legal maze while meeting consumer demand for these increasingly popular products.
THE FUNCTIONAL FOOD MOVEMENT
In a world where science fiction is becoming reality, why wouldn’t consumers expect more from their food than just nutrition? This is where the movement toward functional foods comes in. Brands like Poppi with its popular prebiotic soda and MUD\WTR with its adaptogenic mushroom coffee are paving the way for this growing innovative category. Functional foods incorporate ingredients that contribute to specific health outcomes, such as improved digestion, enhanced immune function, or better heart health. These foods are growing in popularity as consumers become more health-conscious and seek products that support overall well- being.
You can probably see the trend that with innovation comes regulatory complexity and confusion. The regulation of functional foods is no different. Unlike drugs, which are subject to rigorous clinical trials before being marketed, functional foods are regulated either as regular foods or dietary supplements. The convergence of the two categories makes it challenging to determine where a certain functional food or beverage is best positioned. The positioning typically comes down to marketing and product claims. However, factors like using herbal ingredients or selling in the form of a conventional food (like a snack bar) can tip the scales to one side or the other.
Additionally, there’s the ongoing challenge with functional foods of substantiating health claims through research, especially as consumers grow more savvy about what they’re consuming. Poppi, the prebiotic soda brand known for its low-sugar, gut-health-focused beverages, recently faced legal challenges regarding its health claims. In May 2024, Poppi was named in a class-action lawsuit filed in California. The plaintiff alleged that Poppi’s marketing— promoting its sodas as “gut healthy”—was misleading. The lawsuit contended that the drinks contained only two grams of prebiotic fiber per can, an amount deemed insufficient to provide meaningful gut health benefits. Moreover, the high sugar content in the sodas would have negated any potential benefits from the prebiotics if consumers drank enough to get meaningful gut health benefits. Poppi settled for $8.9 million to resolve the class action suit in March 2025 showing that functional food and beverage brands can pay a high price for health claims.13
CONCLUSION
The rapidly evolving world of food innovation brings both incredible opportunities and unique challenges. From lab-grown meat to cannabis-infused beverages and functional foods, the boundaries of what we consider “food” are expanding at an unprecedented rate. As we move from traditional food models to highly specialized, health-focused products, the regulatory landscape is struggling to keep pace. Federal agencies and state governments are finding themselves in a race against innovation, attempting to navigate and regulate new products that were once confined to the realm of science fiction.
Written by Heather Bustos, featured in The Texas Bar Journal
