Palcohol creator Mark Phillips discusses his product, freeze-dried powdered alcohol, which has been approved by federal regulators and could hit liquor store shelves across the country by summer. (Palcohol)

Freeze-dried, powdered alcohol has been approved by federal regulators, meaning the controversial novelty — once called “the Kool-Aid of teen binge drinking” — could hit liquor-store shelves across the country by the summer.

The product, dubbed Palcohol, was given the go-ahead on Tuesday by the Alcohol and Tobacco Tax and Trade Bureau almost a year after it backtracked on its previous authorization, saying the label approvals had been issued in error.

Bureau spokesman Tom Hogue told the Associated Press on Wednesday that all issues had been resolved, giving a small Arizona-based company the green light to roll out four ready-made beverages: cosmopolitans, margaritas, a vodka and a rum. The company said a lemon drop drink should be “approved shortly.”

The company, Lipsmark, will sell the booze in foil pouches that double as the glass. Consumers need only to pour in 5 ounces of water, zip up the bag and shake until the powder dissolves. But the company’s creation has kicked up a controversy in several states where some lawmakers argue the product’s inevitable dangers aren’t worth the risk.

Although the product has been approved at the federal level, states still have a say about sales within their borders. Several, including California, Florida and New York, have already moved to ban it.

[RELATED: Don’t get your hopes up about powdered alcohol just yet]

Last year, New York Sen. Chuck Schumer (D) wrote a letter to the U.S. Food and Drug Administration urging it to ban the substance before it became “the Kool-Aid of teen binge drinking,” the Wall Street Journal reported. He later sponsored legislation to keep it off the market. It was sent to committee late last year, according to the newspaper.

Mothers Against Drunk Driving released a statement last year, saying the advocacy organization sided with Schumer.

“This product is the latest in a long list of specialty alcohol fads,” MADD said. “We’ve seen vaporized alcohol, whipped cream alcohol, caffeinated alcohol — and the list goes on. While the form of alcohol might change, the issues remain the same.

“As with anything ‘new,’ this product may be attractive to youth. … In the case of Palcohol, we share Senator Schumer’s view that the U.S. Food and Drug Administration should carefully review this product as it would seem to have the potential to increase underage drinking.”

An FDA evaluation has determined that the non-alcohol ingredients in Palcohol are in compliance with agency regulations.

When the powder is mixed with water, it is equal to a standard-sized cocktail — about six ounces. Although the company hasn’t offer up its recipe, it said the powders contain alcohol, natural flavoring and Sucralose, which is a sweetener. All varieties are gluten-free.


(Courtesy of Palcohol)

Still, many have expressed concerns about its potential dangers. Some argue the powder will be easier to sneak into public events and spike people’s drinks. Others worry that minors will get their hands on the product and abuse it by snorting it to get high.

“The other potential is that given the flavors it comes in, there’s the potential for it to be very appealing to small children,” Kennon Heard, a medical toxicologist at the University of Colorado, told CBS News last year.

“We had this episode a few years ago with fortified sweet alcohol drinks,” he added, referring to Four Loko, a novelty drink that, at one time, combined alcohol and caffeine. “Younger people who did not know the products were drinking them and getting intoxicated much faster.”

The company that makes Four Loko has since reformulated the drink without caffeine.

[RELATED: Lawmakers begin moves to ban powdered alcohol]

Amid the backlash last year, Lipsmark’s founder Mark Phillips took to YouTube to “set the record straight” regarding such accusations. Since then, the company has also posted a rebuttal on its Web site.

“We believe that powdered alcohol is actually safer than liquid alcohol,” the statement read. The company claimed its product is “five times bigger” than a miniature alcohol bottle, making it much more difficult to conceal. The company also argued the product doesn’t dissolve quickly enough to spike someone’s drink.

Regarding the claim that kids will snort the substance, the company said that “it’s painful to snort” and also “impractical.”

“Why would anyone do that when they can do a shot of liquid vodka in two seconds?” the company said in the statement.

In any case, Hogue told the AP, a potential for abuse “isn’t grounds for us to deny a label.”

Phillips, an avid hiker and backpacker, said he created Palcohol because he enjoys throwing one back “when I get to my destination.” He said he doesn’t enjoy toting bottles of booze, however. Powdered alcohol seemed like the perfect compromise.

As with liquid alcohol, the same rules apply: Consumers must be at least 21 to buy it. Palcohol will be sold at liquor stores and other stores that sell alcohol, but the price tag hasn’t been set yet, Phillips said.

“We aren’t commenting on production or distribution at this time,” he told the AP in an e-mail.

Phillips told CBS Denver his next task is to try to “stop the states from banning it based on misinformation and ignorant speculation.”

“While several states had a knee-jerk reaction and banned it early on, we see the tide is shifting and legislators are becoming more informed,” he said.

Correction: This story has been updated to make clear that the beverage Four Loko no longer contains caffeine. Phusion Projects said it “voluntarily” reformulated the drink and it has been made without caffeine since 2010.

Also, the FDA has not “approved” Palcohol as was previously stated. The agency did not conduct any testing; it only determined that the non-alcohol ingredients in the product were in compliance with its regulations.