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Forbes
19-05-2025
- Business
- Forbes
How Cannabis Drinks Are Reshaping Booze Culture
On a shelf between craft beer and kombucha, something else is showing up in more fridges, bar tabs and DoorDash carts: cannabis. Not flower, not gummies: drinks. Fizzy, fruit-forward, sometimes microdosed, sometimes not. Once confined to dispensaries and health stores, THC beverages are moving into everyday life, and fast. Some brands promise a cleaner, hangover-free buzz. Others position themselves as functional, plant-based upgrades to wine or cocktails. But whatever the pitch, one thing is clear: cannabis drinks are no longer a novelty. They're scaling, diversifying and, in some states, outselling more traditional cannabis products like edibles. Retail data from Hoodie Analytics, which tracks licensed cannabis dispensaries, shows a beverage market maturing quickly, especially at the high-dose end. From March 2024 through March 2025, ready-to-drink drinks containing 100 milligrams of THC generated $141 million in U.S. dispensary sales, compared to $20.7 million for 10-milligram drinks and $8 million for 25-milligram formats. Top-selling flavors included lemonade, root beer and orange, with brands like Keef, Uncle Arnie's and Ray's Lemonade leading in overall velocity. Notably, these figures do not include hemp-derived beverage sales through general retail channels. The broader global category is growing as well. According to Grandview Research, the THC seltzer market was valued at $344.7 million in 2023 and is projected to surpass $2.6 billion by 2030. Among emerging U.S. players, Brēz, America's best-selling cannabis drinks brand, reported $28 million in revenue in 2024 and $13 million in the first quarter of 2025, a number that outpaces many longer-established cannabis beverage brands operating solely within licensed dispensary channels. Yet despite the growth, the industry remains fragmented. Many beverage sales still happen through state-regulated cannabis shops, while others operate under hemp-derived loopholes created by the 2018 Farm Bill. The result is a market with both enormous upside and ongoing legal uncertainty, where measuring 'how big' depends heavily on what kind of THC is being tracked and in what regulatory context. The current wave of cannabis beverages began with the passage of the 2018 Farm Bill, which federally legalized hemp and allowed for the sale of products containing less than 0.3% delta-9 THC by dry weight. That legal framework gave rise to a new class of hemp-derived THC drinks that could be sold outside dispensaries, even in states where recreational marijuana remains illegal. Innovation in the space began earlier in Canada. Beverage companies like Boston Beer entered the market under full federal legalization, launching products such as TeaPot, a line of 5-milligram THC iced teas. 'Cannabis drinks were traditionally confined to dispensaries, which can be intimidating and confusing,' says Paul Weaver, head of cannabis at Boston Beer Company, one of the top brewers in the United States. 'The recent proliferation of hemp-derived THC beverages in American liquor stores has validated our hypothesis.' In the U.S., the category's breakout moment came between 2023 and 2024. As states like Minnesota legalized low-dose THC products for over-the-counter sale, cannabis beverages began appearing in liquor aisles, on retail delivery platforms like DoorDash and through multi-brand DTC sites such as ShopWandererous, launched by Wana Brands to help normalize consumer access. Cannabis beverages are finding footing well beyond coastal dispensaries. According to Wana Brands, some of the most enthusiastic adoption is happening in Southern and Midwestern states where adult-use cannabis remains illegal. 'In emerging markets across the South and Midwest—especially those without adult-use programs—we're seeing consumers turn to hemp-derived beverages as a legal, approachable alternative to alcohol,' says Stephanie Daley, vice president of supply chain and operations at Wana. 'Today's consumers want control, consistency and transparency in what they consume. Beverages deliver on those expectations in a format that feels familiar.' Cannabis Beverage Dosing Guide Courtesy of DoorDash DoorDash, one of the largest last-mile platforms in the U.S., has seen rising demand for hemp-derived THC products delivered directly to consumers. 'Since 2020, DoorDash has been expanding our offerings beyond restaurant delivery, into categories like grocery, alcohol, retail and more to meet evolving consumer needs and expectations of convenience,' says Tom Carroll, general manager of the hemp category at DoorDash. 'With growing demand for hemp-derived THC and CBD products, we saw a natural opportunity to expand access to a wide selection of products consumers enjoy. Since launching, we've continued to see strong and sustained consumer interest in the category, and we're excited to offer eligible customers a seamless, safe way to get products they want, while helping local merchants reach new consumers.' DoorDash data confirms that interest in hemp-derived THC beverages is growing steadily. According to the company, the category is 'highly incremental to existing basket sizes' and sees notable demand spikes around major holidays—up 40% on 4/20 compared to the 2025 baseline, with similar increases around July 4. DoorDash also notes that consumers are embracing these drinks as part of their broader retail experience, not just as a novelty. Meanwhile, companies like are helping to fill the gap in underserved regions. A new venture from the parent company of Edible Arrangements, is rolling out curated hemp marketplaces in states like Texas, Georgia and Florida, places with high demand and limited access. 'We're building out a platform that's all about gifting, food, health and wellness,' CEO Somia Farid Silber told Benzinga. 'This is the wellness part.' Despite the rise of low-dose, lifestyle-oriented drinks, high-potency beverages are still dominating by dollar sales, as evidenced by Hoodie Analytics' data. These often come in small bottles and, while not designed for sipping, remain popular with heavy consumers. But a shift is underway. At brands like Triple, the goal is to build a beverage portfolio that fits seamlessly into the way consumers already drink. 'We're building Triple to be the next great American beverage brand—not a niche cannabis product,' says Lambo Perkins, the emerging company's chief marketing officer. 'In a category where most brands lean toward either wellness minimalism or stoner kitsch, Triple sits confidently in the middle: bold, clean and built for the everyday consumer.' Triple's line includes a 3-milligram High Seltzer (designed for sessionability), a 10-milligram High Lemonade and a 5-milligram enhancer called The Drop. 'Gen Z is redefining what it means to 'have a drink,'' Perkins says. 'They want the ritual, but not the calories, the bloat or the hangover.' That shift toward sessionable, lifestyle-oriented drinks began in part with Cann, one of the earliest low-dose THC beverage brands to gain national traction. Backed by celebrity investors and widely credited with introducing the idea of 'social tonics,' Cann helped frame cannabis drinks as a mainstream alternative to beer or hard seltzer. Its model—2mg of THC per can—set the tone for a new generation of microdosed products aimed at the wellness-conscious drinker. At Wana, that trend toward intentionality is also evident. 'Consumers aren't chasing trends—they're searching for solutions,' says Daley. 'That's why we're starting to see a shift toward functional blends containing other cannabinoids in addition to THC, such as CBD and CBG.' Even in curated marketplaces like which carries fewer than 40 SKUs, drinks remain a consistent part of the offering, often positioned as an approachable entry point for new or wellness-minded consumers. 'This is about offering a safer, more straightforward way for people to try or access THC,' said Thomas Winstanley in a recent interview. 'Especially in places where people aren't sure what's legal or safe.' The category is also drawing attention from celebrity entrepreneurs and wellness innovators. Snoop Dogg, through his venture Iconic Tonics, has backed a portfolio of cannabis beverages aimed at mainstream social settings. Meanwhile, brands like Adaptaphoria are leaning into mood-enhancing, CBD-based formulations built for relaxation, focus and stress relief, signaling that the future of cannabis drinks may be as much about wellness as it is about the high. Snoop Dogg and his cannabis beverages lineup Photo Courtesy of Iconic Tonics While some cannabis brands present THC beverages as a direct substitute for alcohol, most industry players frame them as something else entirely: a new kind of social ritual. At Boston Beer Company, the approach is additive rather than competitive. 'Cannabis beverages are a nascent category, making it difficult to directly correlate specific cannibalization of our individual brands,' says Weaver. 'However, the macro-impact on the beverage alcohol category can no longer be ignored.' That shift is already playing out in retail behavior. DoorDash reports that when customers order from alcohol retailers carrying hemp-derived THC products, two-thirds of their basket value comes from hemp, with the remaining third from traditional alcohol. Rather than choosing one or the other, consumers appear to be blending both, mixing microdosed drinks with legacy favorites depending on the occasion. Triple's CMO, Lambo Perkins, sees that pattern in cultural terms. 'We believe Gen Z is mindful, in control and interested in experiences rather than consequences,' he says. 'They still want to sip on something social; they're just over the hangover, the calories and the bloat.' That generational attitude is reflected in the way cannabis beverages show up in real life: at tailgates, beach days, dinner parties and post-work wind-downs. 'It's about giving people the same ritual as a beer or cocktail,' says Perkins, 'without the baggage.' For companies like Wana and Brēz, that also means offering predictable onset and duration, clear labeling and consistent effects—features that align with how alcohol has been regulated and marketed for decades. The difference is the underlying active ingredient and the intent. By nearly all measures, yes. California alone saw monthly cannabis beverage sales jump from $2.8 million in March 2024 to over $4 million by March 2025, according to Hoodie Analytics. Brands like Ray's Lemonade and Ayrloom continue to lead in velocity, while smaller players like Sips and Soganja are also gaining ground. On the national scale, mainstream alcohol retailers like Total Wine & More and ABC Fine Wine & Spirits are expanding their hemp-derived offerings. 'We believe there's growing interest among our alcohol partners in expanding their DoorDash offerings to include hemp-derived THC and CBD,' a company spokesperson confirms. At the same time, operators are bracing for increased regulatory scrutiny, as Congress debates a new Farm Bill that could redefine the legal boundaries for hemp-derived THC—and as multiple states consider outright bans. Rather than resist the shift, many in the industry are actively pushing for smarter, more consistent oversight. 'We have no interest in a wild west approach,' says Triple COO Will Spartin, who also sits on the board of the Hemp Beverage Alliance. 'We are advocating for positive regulation that balances between a free market approach and the need to protect consumer safety.' That sentiment is echoed by leaders at who see responsible retail and clear milligram caps as essential for the category's survival. 'Regulation in this category can be a net positive,' Winstanley said. 'It helps weed out bad actors. It legitimizes good ones. And it creates a safer space for the consumer.' Still, the future of cannabis beverages will depend as much on cultural integration as it does on legal frameworks. As Wana's Daley puts it, 'We're moving past the 'can you believe this has THC?' moment and into 'where does this fit in my life?'' For now, the answer seems to be: on the shelf, in the cart and increasingly, in the fridge. As federal clarity lags and state laws shift in real time, cannabis drinks continue to evolve from curiosity to category. What was once a niche product sold in dispensaries is now a growing segment in liquor stores, delivery apps and mainstream retail—offering consumers a new way to relax, reconnect or simply replace a drink. Whether they're seen as a threat to alcohol, a wellness tool or just a better-tasting gummy, one thing is certain: cannabis beverages aren't going away. They're just getting started.
Yahoo
10-05-2025
- Business
- Yahoo
THC drinks are flying off shelves. Can it last?
In June 2023, Jon Halper started selling THC beverages at Top Ten Liquors, his chain of Minnesota stores. The drinks, which contain the main intoxicating chemical compound found in cannabis, were a massive hit. 'Immediately, the sales took off,' said Halper. 'We've never seen anything explosive like this.' After just two years, THC beverages make up about 15% of overall sales, he said. 'It's hard to believe this growth isn't going to be astronomical.' The time is right for a THC beverage boom. Many Americans are embracing a California sober lifestyle — drinking less alcohol, which they see as harmful to health, and trying out marijuana instead. A study published in 2024 found that a higher number of Americans reported using cannabis every day than drinking alcohol daily. And thanks to what many consider to be a loophole in the 2018 farm bill, THC beverage makers have been able to rapidly launch their products across the country with little oversight. Now, states are trying to make sense of the bill's language, setting up their own regulations and raising questions for the future of the fast-growing industry. For years, beverage companies toyed with the idea of using THC in drinks. But cannabis is a tricky business. Marijuana is a 'schedule I controlled substance' in the United States, meaning companies that sell marijuana products legally don't get certain tax benefits. The classification also makes it hard for those firms to get funding from financial institutions wary of breaking federal laws. So drink makers avoided cannabis. Then the 2018 farm bill changed the game. The lengthy document governs a wide range of agricultural and food assistance programs, and it includes a few pages that legalized the production of hemp, defined as a cannabis plant that has no more than 0.3% delta-9 THC on a dry-weight basis (cannabis plants with higher concentrations of THC are classified as marijuana). That language spawned a fast-growing market of technically legal THC beverages that are still potent enough to make you feel something. At the time, 'these drinks did not exist,' said Frank Colombo, managing director of Viridian Capital Advisors, which specializes in cannabis. 'Nobody anticipated this whole category of hemp-based intoxicants, let alone hemp-based THC drinks.' In 2020, the US market for hemp-derived THC drinks amounted to about $400,000, according to Brightfield Group, a consumer insights and market research firm that has been tracking the THC drink industry. By 2024, the market had grown nearly 10 times bigger, reaching $382 million dollars. This year, it will grow to $571 million, Brightfield predicts, with more expansion to come. THC beverage makers have been exempt from the onerous regulations that apply to marijuana companies. But some entrepreneurs seek a Goldilocks zone for regulation: Too little could allow bad actors — those who market to children or sell high-dosage products made with synthetic ingredients — to proliferate, encouraging bans. Too much would constrain growth. But the right amount would legitimize their businesses, putting them on a path to skyrocketing growth. Companies are betting that things will go their way. Experts are not so sure. 'I do not think it's going to go perfectly,' said Hilary Bricken, an attorney with Husch Blackwell who focuses on the hemp and cannabis industries. She can 'appreciate the confidence' of young companies trying to forge a path, but 'it's still going to be a bumpy road.' When Cann first launched in 2019, the THC beverage was only available at a handful of cannabis dispensaries. 'At the time, we thought that was the only place you could sell these products,' explained Jake Bullock, co-founder and CEO of Cann. The drink had initially derived its THC and CBD, a non-psychoactive cannabinoid present in Cann drinks, from marijuana. Then in 2022, a new Minnesota law helped clarify the farm bill's language, explicitly allowing certain hemp-derived THC products to be sold to customers aged 21 or older. 'We were like, 'Well, wait, can we extract THC and CBD from hemp?'' Bullock recounted. They could, and it took just 60 days. Cann launched the updated product in Minnesota in October of that year. Today, Cann is sold in stores across 30 states and available direct-to-customer in at least 35 states. In 2024, revenue grew over 70%, according to the company. It expects over 100% growth this year. Cann and other THC drink brands describe their products as social tonics, designed to give a light, mellow buzz that, they say, will help you feel good at parties but not hungover the next day. Cann's drinks come in flavors like blood orange cardamom and yuzu elderflower and have no more than 10 milligrams of THC per can. 'If you think about alcohol and caffeine, we drink these in microdoses,' Bullock said. 'There's a reason you can have a few cups of coffee or a couple of glasses of wine. We wanted to capture that same kind of concept.' Even shoppers who aren't familiar with THC drinks are in the market for a new kind of beverage: Stroll down a refrigerator aisle and you'll see prebiotic sodas in countless flavors, botanical teas, canned lattes with a variety of milks, sparkling everythings, non-alcoholic beers and more. And over the past few years, Cann has been joined by scores of competitors. For example, hi Seltzer, a calorie-free drink that comes in fruit flavors and contains five milligrams of THC, launched in 2023. 'We're running somewhere between 1.2 (million) and 1.5 million cans a month,' CEO Louis Police said in April, 'which doesn't even satisfy the demand.' BRĒZ, a THC beverage brand that use lion's mane mushroom extract, has seen sales explode since it started in 2023. In 2024, the company recorded about $28 million in revenue, said founder and CEO Aaron Nosbisch. This year, it's on track to hit about $75 million. The market has also attracted alcohol makers like Samantha Lee, co-founder of Hopewell Brewing Company in Chicago, Illinois. Last year, she and her Hopewell co-founders (plus one more) launched Choom, a sparkling canned THC beverage that comes in mostly citrus flavors. 'We're seeing a lot of our current customer base who are really excited about (Choom),' she said. Lee is optimistic that Illinois will regulate the market in a way that well help business thrive. 'We're seeing a lot of positive movements in Illinois that will codify this as a law,' she said. But until that happens, major retailers may avoid selling brands like Choom. Without clear regulation, 'there's only so much we can do.' The Hemp Beverage Alliance (HBA), a trade group formed two years ago, shares its own regulatory principles on labeling, dosing, age restrictions and more on its website. Brands are also educating distributors, retailers and consumers about their THC drinks. But self-regulation can only go so far. 'It's going to be challenging for someone to truly break out… until there is something at the federal level that is a clear indication that these products can be scaled and will be legal,' said Duane Stanford, executive editor and publisher of Beverage Digest, a trade publication. Ideally, there would be 'a federal framework that guides the entire country' said Christopher Lackner, president of the HBA. But that's a moonshot, at least in the near term. For now, the alliance, which represents over 250 brands, retailers and distributors across North America, is working toward getting industry-friendly regulation at the state level. Half of US states permit hemp-derived delta-9 THC beverages as of May 1, according to the HBA. The rest either severely limit THC content in these drinks, prohibit their sale outright or have not regulated the product, by the HBA's count. As states decide how to move forward, the federal government could crack down or make hemp illegal again. 'If the FDA starts getting increased accounts of, let's say, kids getting ahold of this stuff, or consumers being misled (or) having adverse reactions,' it might set its own restrictions, said Bricken, the Husch Blackwell attorney. Then there's the question of the farm bill. The current legislation has been extended through later this year. But if the administration decides to make hemp illegal in the next farm bill, it would have a chilling effect on the THC beverage industry, said Whitt Steineker, partner at Bradley and co-chair of the law firm's cannabis industry team. 'You would see the money flow really dry up,' he said. Halper, of Top Ten Liquors, isn't quite sure what to expect from the federal government. 'We all talk about the next farm bill,' he said, adding: 'None of us control what is happening in Washington.'
CNN
10-05-2025
- Business
- CNN
THC drinks are flying off shelves. Can it last?
In June 2023, Jon Halper started selling THC beverages at Top Ten Liquors, his chain of Minnesota stores. The drinks, which contain the main intoxicating chemical compound found in cannabis, were a massive hit. 'Immediately, the sales took off,' said Halper. 'We've never seen anything explosive like this.' After just two years, THC beverages make up about 15% of overall sales, he said. 'It's hard to believe this growth isn't going to be astronomical.' The time is right for a THC beverage boom. Many Americans are embracing a California sober lifestyle — drinking less alcohol, which they see as harmful to health, and trying out marijuana instead. A study published in 2024 found that a higher number of Americans reported using cannabis every day than drinking alcohol daily. And thanks to what many consider to be a loophole in the 2018 farm bill, THC beverage makers have been able to rapidly launch their products across the country with little oversight. Now, states are trying to make sense of the bill's language, setting up their own regulations and raising questions for the future of the fast-growing industry. For years, beverage companies toyed with the idea of using THC in drinks. But cannabis is a tricky business. Marijuana is a 'schedule I controlled substance' in the United States, meaning companies that sell marijuana products legally don't get certain tax benefits. The classification also makes it hard for those firms to get funding from financial institutions wary of breaking federal laws. So drink makers avoided cannabis. Then the 2018 farm bill changed the game. The lengthy document governs a wide range of agricultural and food assistance programs, and it includes a few pages that legalized the production of hemp, defined as a cannabis plant that has no more than 0.3% delta-9 THC on a dry-weight basis (cannabis plants with higher concentrations of THC are classified as marijuana). That language spawned a fast-growing market of technically legal THC beverages that are still potent enough to make you feel something. At the time, 'these drinks did not exist,' said Frank Colombo, managing director of Viridian Capital Advisors, which specializes in cannabis. 'Nobody anticipated this whole category of hemp-based intoxicants, let alone hemp-based THC drinks.' In 2020, the US market for hemp-derived THC drinks amounted to about $400,000, according to Brightfield Group, a consumer insights and market research firm that has been tracking the THC drink industry. By 2024, the market had grown nearly 10 times bigger, reaching $382 million dollars. This year, it will grow to $571 million, Brightfield predicts, with more expansion to come. THC beverage makers have been exempt from the onerous regulations that apply to marijuana companies. But some entrepreneurs seek a Goldilocks zone for regulation: Too little could allow bad actors — those who market to children or sell high-dosage products made with synthetic ingredients — to proliferate, encouraging bans. Too much would constrain growth. But the right amount would legitimize their businesses, putting them on a path to skyrocketing growth. Companies are betting that things will go their way. Experts are not so sure. 'I do not think it's going to go perfectly,' said Hilary Bricken, an attorney with Husch Blackwell who focuses on the hemp and cannabis industries. She can 'appreciate the confidence' of young companies trying to forge a path, but 'it's still going to be a bumpy road.' When Cann first launched in 2019, the THC beverage was only available at a handful of cannabis dispensaries. 'At the time, we thought that was the only place you could sell these products,' explained Jake Bullock, co-founder and CEO of Cann. The drink had initially derived its THC and CBD, a non-psychoactive cannabinoid present in Cann drinks, from marijuana. Then in 2022, a new Minnesota law helped clarify the farm bill's language, explicitly allowing certain hemp-derived THC products to be sold to customers aged 21 or older. 'We were like, 'Well, wait, can we extract THC and CBD from hemp?'' Bullock recounted. They could, and it took just 60 days. Cann launched the updated product in Minnesota in October of that year. Today, Cann is sold in stores across 30 states and available direct-to-customer in at least 35 states. In 2024, revenue grew over 70%, according to the company. It expects over 100% growth this year. Cann and other THC drink brands describe their products as social tonics, designed to give a light, mellow buzz that, they say, will help you feel good at parties but not hungover the next day. Cann's drinks come in flavors like blood orange cardamom and yuzu elderflower and have no more than 10 milligrams of THC per can. 'If you think about alcohol and caffeine, we drink these in microdoses,' Bullock said. 'There's a reason you can have a few cups of coffee or a couple of glasses of wine. We wanted to capture that same kind of concept.' Even shoppers who aren't familiar with THC drinks are in the market for a new kind of beverage: Stroll down a refrigerator aisle and you'll see prebiotic sodas in countless flavors, botanical teas, canned lattes with a variety of milks, sparkling everythings, non-alcoholic beers and more. And over the past few years, Cann has been joined by scores of competitors. For example, hi Seltzer, a calorie-free drink that comes in fruit flavors and contains five milligrams of THC, launched in 2023. 'We're running somewhere between 1.2 (million) and 1.5 million cans a month,' CEO Louis Police said in April, 'which doesn't even satisfy the demand.' BRĒZ, a THC beverage brand that use lion's mane mushroom extract, has seen sales explode since it started in 2023. In 2024, the company recorded about $28 million in revenue, said founder and CEO Aaron Nosbisch. This year, it's on track to hit about $75 million. The market has also attracted alcohol makers like Samantha Lee, co-founder of Hopewell Brewing Company in Chicago, Illinois. Last year, she and her Hopewell co-founders (plus one more) launched Choom, a sparkling canned THC beverage that comes in mostly citrus flavors. 'We're seeing a lot of our current customer base who are really excited about (Choom),' she said. Lee is optimistic that Illinois will regulate the market in a way that well help business thrive. 'We're seeing a lot of positive movements in Illinois that will codify this as a law,' she said. But until that happens, major retailers may avoid selling brands like Choom. Without clear regulation, 'there's only so much we can do.' The Hemp Beverage Alliance (HBA), a trade group formed two years ago, shares its own regulatory principles on labeling, dosing, age restrictions and more on its website. Brands are also educating distributors, retailers and consumers about their THC drinks. But self-regulation can only go so far. 'It's going to be challenging for someone to truly break out… until there is something at the federal level that is a clear indication that these products can be scaled and will be legal,' said Duane Stanford, executive editor and publisher of Beverage Digest, a trade publication. Ideally, there would be 'a federal framework that guides the entire country' said Christopher Lackner, president of the HBA. But that's a moonshot, at least in the near term. For now, the alliance, which represents over 250 brands, retailers and distributors across North America, is working toward getting industry-friendly regulation at the state level. Half of US states permit hemp-derived delta-9 THC beverages as of May 1, according to the HBA. The rest either severely limit THC content in these drinks, prohibit their sale outright or have not regulated the product, by the HBA's count. As states decide how to move forward, the federal government could crack down or make hemp illegal again. 'If the FDA starts getting increased accounts of, let's say, kids getting ahold of this stuff, or consumers being misled (or) having adverse reactions,' it might set its own restrictions, said Bricken, the Husch Blackwell attorney. Then there's the question of the farm bill. The current legislation has been extended through later this year. But if the administration decides to make hemp illegal in the next farm bill, it would have a chilling effect on the THC beverage industry, said Whitt Steineker, partner at Bradley and co-chair of the law firm's cannabis industry team. 'You would see the money flow really dry up,' he said. Halper, of Top Ten Liquors, isn't quite sure what to expect from the federal government. 'We all talk about the next farm bill,' he said, adding: 'None of us control what is happening in Washington.'
CNN
10-05-2025
- Business
- CNN
THC drinks are flying off shelves. Can it last?
In June 2023, Jon Halper started selling THC beverages at Top Ten Liquors, his chain of Minnesota stores. The drinks, which contain the main intoxicating chemical compound found in cannabis, were a massive hit. 'Immediately, the sales took off,' said Halper. 'We've never seen anything explosive like this.' After just two years, THC beverages make up about 15% of overall sales, he said. 'It's hard to believe this growth isn't going to be astronomical.' The time is right for a THC beverage boom. Many Americans are embracing a California sober lifestyle — drinking less alcohol, which they see as harmful to health, and trying out marijuana instead. A study published in 2024 found that a higher number of Americans reported using cannabis every day than drinking alcohol daily. And thanks to what many consider to be a loophole in the 2018 farm bill, THC beverage makers have been able to rapidly launch their products across the country with little oversight. Now, states are trying to make sense of the bill's language, setting up their own regulations and raising questions for the future of the fast-growing industry. For years, beverage companies toyed with the idea of using THC in drinks. But cannabis is a tricky business. Marijuana is a 'schedule I controlled substance' in the United States, meaning companies that sell marijuana products legally don't get certain tax benefits. The classification also makes it hard for those firms to get funding from financial institutions wary of breaking federal laws. So drink makers avoided cannabis. Then the 2018 farm bill changed the game. The lengthy document governs a wide range of agricultural and food assistance programs, and it includes a few pages that legalized the production of hemp, defined as a cannabis plant that has no more than 0.3% delta-9 THC on a dry-weight basis (cannabis plants with higher concentrations of THC are classified as marijuana). That language spawned a fast-growing market of technically legal THC beverages that are still potent enough to make you feel something. At the time, 'these drinks did not exist,' said Frank Colombo, managing director of Viridian Capital Advisors, which specializes in cannabis. 'Nobody anticipated this whole category of hemp-based intoxicants, let alone hemp-based THC drinks.' In 2020, the US market for hemp-derived THC drinks amounted to about $400,000, according to Brightfield Group, a consumer insights and market research firm that has been tracking the THC drink industry. By 2024, the market had grown nearly 10 times bigger, reaching $382 million dollars. This year, it will grow to $571 million, Brightfield predicts, with more expansion to come. THC beverage makers have been exempt from the onerous regulations that apply to marijuana companies. But some entrepreneurs seek a Goldilocks zone for regulation: Too little could allow bad actors — those who market to children or sell high-dosage products made with synthetic ingredients — to proliferate, encouraging bans. Too much would constrain growth. But the right amount would legitimize their businesses, putting them on a path to skyrocketing growth. Companies are betting that things will go their way. Experts are not so sure. 'I do not think it's going to go perfectly,' said Hilary Bricken, an attorney with Husch Blackwell who focuses on the hemp and cannabis industries. She can 'appreciate the confidence' of young companies trying to forge a path, but 'it's still going to be a bumpy road.' When Cann first launched in 2019, the THC beverage was only available at a handful of cannabis dispensaries. 'At the time, we thought that was the only place you could sell these products,' explained Jake Bullock, co-founder and CEO of Cann. The drink had initially derived its THC and CBD, a non-psychoactive cannabinoid present in Cann drinks, from marijuana. Then in 2022, a new Minnesota law helped clarify the farm bill's language, explicitly allowing certain hemp-derived THC products to be sold to customers aged 21 or older. 'We were like, 'Well, wait, can we extract THC and CBD from hemp?'' Bullock recounted. They could, and it took just 60 days. Cann launched the updated product in Minnesota in October of that year. Today, Cann is sold in stores across 30 states and available direct-to-customer in at least 35 states. In 2024, revenue grew over 70%, according to the company. It expects over 100% growth this year. Cann and other THC drink brands describe their products as social tonics, designed to give a light, mellow buzz that, they say, will help you feel good at parties but not hungover the next day. Cann's drinks come in flavors like blood orange cardamom and yuzu elderflower and have no more than 10 milligrams of THC per can. 'If you think about alcohol and caffeine, we drink these in microdoses,' Bullock said. 'There's a reason you can have a few cups of coffee or a couple of glasses of wine. We wanted to capture that same kind of concept.' Even shoppers who aren't familiar with THC drinks are in the market for a new kind of beverage: Stroll down a refrigerator aisle and you'll see prebiotic sodas in countless flavors, botanical teas, canned lattes with a variety of milks, sparkling everythings, non-alcoholic beers and more. And over the past few years, Cann has been joined by scores of competitors. For example, hi Seltzer, a calorie-free drink that comes in fruit flavors and contains five milligrams of THC, launched in 2023. 'We're running somewhere between 1.2 (million) and 1.5 million cans a month,' CEO Louis Police said in April, 'which doesn't even satisfy the demand.' BRĒZ, a THC beverage brand that use lion's mane mushroom extract, has seen sales explode since it started in 2023. In 2024, the company recorded about $28 million in revenue, said founder and CEO Aaron Nosbisch. This year, it's on track to hit about $75 million. The market has also attracted alcohol makers like Samantha Lee, co-founder of Hopewell Brewing Company in Chicago, Illinois. Last year, she and her Hopewell co-founders (plus one more) launched Choom, a sparkling canned THC beverage that comes in mostly citrus flavors. 'We're seeing a lot of our current customer base who are really excited about (Choom),' she said. Lee is optimistic that Illinois will regulate the market in a way that well help business thrive. 'We're seeing a lot of positive movements in Illinois that will codify this as a law,' she said. But until that happens, major retailers may avoid selling brands like Choom. Without clear regulation, 'there's only so much we can do.' The Hemp Beverage Alliance (HBA), a trade group formed two years ago, shares its own regulatory principles on labeling, dosing, age restrictions and more on its website. Brands are also educating distributors, retailers and consumers about their THC drinks. But self-regulation can only go so far. 'It's going to be challenging for someone to truly break out… until there is something at the federal level that is a clear indication that these products can be scaled and will be legal,' said Duane Stanford, executive editor and publisher of Beverage Digest, a trade publication. Ideally, there would be 'a federal framework that guides the entire country' said Christopher Lackner, president of the HBA. But that's a moonshot, at least in the near term. For now, the alliance, which represents over 250 brands, retailers and distributors across North America, is working toward getting industry-friendly regulation at the state level. Half of US states permit hemp-derived delta-9 THC beverages as of May 1, according to the HBA. The rest either severely limit THC content in these drinks, prohibit their sale outright or have not regulated the product, by the HBA's count. As states decide how to move forward, the federal government could crack down or make hemp illegal again. 'If the FDA starts getting increased accounts of, let's say, kids getting ahold of this stuff, or consumers being misled (or) having adverse reactions,' it might set its own restrictions, said Bricken, the Husch Blackwell attorney. Then there's the question of the farm bill. The current legislation has been extended through later this year. But if the administration decides to make hemp illegal in the next farm bill, it would have a chilling effect on the THC beverage industry, said Whitt Steineker, partner at Bradley and co-chair of the law firm's cannabis industry team. 'You would see the money flow really dry up,' he said. Halper, of Top Ten Liquors, isn't quite sure what to expect from the federal government. 'We all talk about the next farm bill,' he said, adding: 'None of us control what is happening in Washington.'
