The new era of cannabis consumption

The rise of intoxicating hemp products is changing the trajectory of the cannabis industry and opening new paths for social consumption, creating regulatory confusion. While lawmakers and industry leaders scramble to catch up, many advocates view hemp-derived products as a vehicle for fast-track normalization and broader consumer adoption.

RELATED: The science-fueled vision of MJ Unpacked

On a recent MJ Unpacked panel in Atlantic City on the future of hemp and cannabis beverages, Ben Larson, CEO of Vertosa, emphasized the disarray plaguing the hemp space.

“Building unified voices between all these different groups has been incredibly challenging,” he said, pointing to a patchwork of state laws and the damage done by bad actors. Panelist Kristi Palmer, co-founder of Kiva Confections, added that the high-dose THC products sold in convenience stores risk alienating both regulators and the public and hurting the reputation of the entire industry.

The exhibit hall at MJ Unpacked Atlantic City, 2025 Photo: Strix

To address this, Larson proposed a bifurcated market model as a way to ease THC products into the mainstream by catering to novice users and the canna-curious. In this approach, low-dose hemp-derived products would be available in general retail settings, while high-dose THC products would remain confined to licensed dispensaries.

“If you look at state-level conversations, we are trending toward a two-tiered system,” he said. “Think of hemp as the entry point for safe, low-dose products you can find next to alcohol or in the wellness aisle—and reserve the higher doses for regulated cannabis channels.”

Palmer said one of Kiva’s biggest challenges operating in both markets is maintaining product quality and the same taste and consistency when offering the same product in both hemp and cannabis versions. She added, “The hard part about the consumer experience right now is that it’s inconsistent and degrades both channels.” Ben Larson said having two different highly regulated licences is challenging and warns anyone contemplating the same to stay on top of the respective regulations.

Christopher Lackner, President of the Hemp Beverage Alliance, echoed concerns about regulatory chaos. In Louisiana, he said, processors are expected to comply with rules that haven’t even been published.

“Unlike the cannabis industry, where regulations came first, hemp has sales in motion while regulators play catch-up,” he said.

RELATED: Never leave the weed dispensary disappointed again

Panelists agreed that fragmented messaging across the supply chain is creating confusion for regulators.

“Depending on who you’re talking to, you’re hearing different visions, which makes it nearly impossible for regulators to design a cohesive system,” noted Larson. While many advocate for unifying hemp and marijuana under one regulatory umbrella, Larson points out, “We all agree that THC is THC, but that doesn’t matter to regulators or distributors who slam the door when they hear the word’ cannabis.’ Hemp is the politically viable path for now.”

Panelists on stage at MJ Unpacked Atlantic City 2025. Photo: Strix

Hemp’s State of the Union

Christopher Lackner described the U.S. hemp regulatory landscape as “wildly fragmented,” pointing to stark contrasts in how states approach the issue. In California, Governor Newsom has publicly denounced hemp products, while Minnesota has embraced a common-sense approach to regulating low-dose, hemp-derived cannabinoids alongside licensed cannabis.

Currently, 25 to 30 states have implemented some form of hemp beverage regulation, with around 20 actively working to strengthen or establish rules.

“We need to get used to constant change,” Lackner noted, comparing the evolving hemp regulations to the ongoing legislative tweaks seen in the alcohol industry. As mainstream retailers like Total Wine and Edibles.com begin stocking hemp-derived products, brands must carefully navigate the shifting legal landscape to stay shelf-ready and compliant.

RELATED: The grit and grind of Revely and New York’s craft cannabis community

Breaking Into the Mainstream Market

Launching a hemp beverage brand is becoming more challenging by the minute, as a flood of new entrants saturate the market, making it increasingly difficult to stand out or secure top-tier distribution.

Kristi Palmer highlighted the opportunity and confusion that brands face when trying to enter mainstream retail.

“Retailers like Total Wine don’t even know what they’re looking for yet,” she said, noting widespread misunderstanding across the supply chain from consumers to distributor sales reps around hemp versus cannabis. This confusion, Palmer points out, offers a key opportunity for brands to lead with education and position themselves as trusted, knowledgeable partners.

Ben Larson stressed that winning with mainstream distribution requires industrial-scale sophistication across sourcing, logistics, and compliance.

“The level of investment and risk is significantly higher,” he said, noting that brands must meet the same rigorous standards expected by national retailers like Costco. While hemp products don’t need to go through licensed THC channels, the complexities of formulating with cannabinoids remain a learning curve in manufacturing beverages.

An exhibitor offers non-medicated samples of edibles at MJ Unpacked Atlantic City, 2025. Photo: Strix

Christopher Lackner reinforced the high stakes.

“Big box buyers don’t want to risk their jobs or reputations on an unregulated product if something goes wrong,” he said. Product safety, supply consistency, and financial stability are non-negotiable for staying on the shelf and out of trouble.

RELATED: Weed takes unexpected priority with feds

The American Beverage Licensees recently issued a policy memo in a call to regulate intoxicating hemp products.

Executive Director John Bodnovich said, “With the passage of the federal farm bill in 2018 and the reality of growing markets for intoxicating THC products, states are increasingly compelled to develop comprehensive state regulatory frameworks for intoxicating THC products.”

He added, “Given their considerable experience with beverage alcohol regulation, beverage alcohol retailers are best positioned to not only sell these products, but also to provide practical advice to states on how to implement a robust regulatory model that inherently balances public safety, business interests, and consumer access.”

Consumption Lounges Are The Next Giant Leap                 

At MJ Unpacked’s panel on building successful cannabis consumption lounges, speakers emphasized that success hinges on a clear, consumer-focused strategy, diversified revenue streams, and an immersive, experience-driven environment. Moderator Rachelle Gordon, Editor of GreenState, noted that many visionary lounge concepts have struggled or failed and pointed to the recent closing of the first consumption lounge in Las Vegas as a cautionary example.

“What makes a successful consumption lounge?” she asked.

RELATED: Surprising destination set to become weed getaway

Sarah Stewart, a hospitality consultant, stressed the importance of creating familiar and welcoming spaces.

“To walk through a dispensary, to get to a lounge is not very normalized,” she said. “You won’t attract the masses unless you have a standalone entrance that feels familiar and comfortable.” She also highlighted the need for multiple revenue streams, suggesting tasting flights, single-serve products, and branded events. “People aren’t vibing with cover charges anymore,” she said. “The real opportunity is in upselling, just like in restaurants or bars.”

An investor ‘mega’ panel at MJ Unpacked, Atlantic City 2025. Photo: Strix

Marty Higgins, CEO of Urbana, a California-based cannabis lounge operator, described lounges as brand amplifiers that draw in new consumers through curated events and product experiences. Because his lounges only allow vaping, he said sales for devices like the Volcano and Puffco have increased, and reiterated it as a way to upsell. He also advised dispensaries to have a retail strategy that complements the lounge for brand alignment. “Retail sales are not the same as hospitality sales,” he said.

Panelists also discussed the regulatory gray areas lounges must navigate and emphasized the need for “creativity” to work within legal boundaries. While direct food and cannabis service under the same license is restricted in most states, solutions suggested include operating separate LLCs with distinct entrances for the dispensary and lounge, or partnering with outside vendors to provide food at events.

RELATED: Coral Cove Jamaica: a plant-medicine retreat

Looking ahead, panelists see the future of lounges in innovative hospitality formats like movie theaters, concert venues, or THC beverages served in bars, paving the way for normalization and expanded consumer access.

From the surge of hemp-derived beverages to the emergence of cannabis consumption lounges, the industry is entering a transformative era. Cannabis is no longer confined to the dispensary; whether through a five-milligram seltzer at your local convenience store or a premium lounge experience downtown, the future of cannabis is more accessible, social, and mainstream than ever before.

*This article was submitted by a guest contributor. The author is solely responsible for the content.