THC Beverage Boom: Why Cannabis Brands Are Betting on Hemp Drinks

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The cannabis beverage market is on the rise — but hemp-derived products are making the biggest splash thanks to a legal quirk in the 2018 Farm Bill, beverages infused with THC from hemp (rather than marijuana) can be manufactured and sold almost anywhere, often taxed and distributed like any other consumer packaged goods (CPG). Cannabis-infused products, by contrast, remain highly restricted: legal only on a state-by-state basis, penalized under local and federal tax codes, and excluded from traditional retail.

According to consumer research firm Brightfield Group, limited access to adult-use cannabis continues to push consumers toward hemp-derived products — especially as major distributors expand their offerings to convenience stores, smoke and vape shops, and liquor retailers. Additionally, Brightfield analysts reported social-listening insights reveal a rising number of women share their experiences with hemp-derived products for female-health-related concerns like menopause and premenstrual syndrome, highlighting a key demographic for THC beverage brands to engage.

Cannabis brands willing to explore the hemp space can tap into national markets, major distribution networks, and a growing consumer base hungry for smoke-free, social, and functional wellness options. Major players including Uncle Arnie’s, Jones Soda Co., Ayrloom, and Wana Brands all offer hemp-infused beverage lines. Cann, once a darling of the regulated cannabis sector, switched to hemp in 2022. The company’s products now are sold in liquor stores, smoke shops, convenience stores, and bars across thirty states and are available via online order in thirty-five states. Within two years of the transition, the company’s already-impressive revenue grew by 70 percent.

Curaleaf, one of the largest licensed cannabis companies in the United States, is making a significant bet on hemp. In April, the company transformed one of its Florida dispensaries into a hemp storefront where it offers its portfolio of Select-branded hemp-derived-THC products as well as intoxicating hemp products from a bevy of other big-name brands. Edible Brands, parent company of Edible Arrangements, also plans to devote a brick-and-mortar retail location in Atlanta to hemp-infused products. DoorDash, another household name in mainstream America, began delivering low-dose hemp THC products early this year.

A market definitely exists, but as with any other emerging commercial sector, the devil is in the details. A staggering 85 percent of new CPG products fail to gain traction with consumers, according to a Nielsen report. Success in a highly competitive and capital-intensive sector hinges on careful planning, strategic positioning, and a deep understanding of consumer behavior and market dynamics. Nowhere is this truer than in the THC-infused beverage aisle at the local minimart, grocery store, or liquor retailer, where brands must not only differentiate themselves in a saturated landscape but also educate customers about a relatively new way to consume cannabinoids — all within the few seconds it takes for a shopper to scan a crowded shelf.

So, how can brands get it right? From branding and flavor choices to manufacturing and launch tactics, success requires more than just good taste. Here’s how to approach the opportunity strategically.

Get the branding right

John Craven, founder and editorial director of leading beverage industry publisher BevNet, advises brands to “shed the stoner image and refresh and rebrand the industry with an attractive look to appeal to the mainstream consumer.” Since most liquor stores place THC beverages alongside ready-to-drink cocktails and non-alcoholic alternatives, standing out with smart, lifestyle-forward packaging is essential.

Brands like Wynk use lively visuals and bold packaging to position their products as alcohol-free alternatives.

Brands like Cycling Frog and Flyers have leaned into distinctive visual identities. Cycling Frog uses a quirky logo of a frog on a tricycle, while Flyers channels cocktail nostalgia with flavors like Old Fashioned in alcohol-free formats. The goal: make THC feel familiar, fun, and functional.

Don’t forget to play up potential beverage use scenarios. Although many cannabis consumers seek products to address need states, hemp-beverage consumers often plan consumption around specific times of day. A light, refreshing afternoon drink evokes vibes that are very different from a robust happy-hour cocktail.

“THC beverages are not just a replacement for alcohol but an option for multiple beverage occasions,” according to Happi co-founder Lisa Hurwitz. The hemp-derived beverage brand tailored its product line to address a variety of classic use cases. For example, Happi Dance, formulated for daytime consumption, contains THCV for focus. Happi Glow, designed for winding down after work, features a blend of CBG, CBN, THC, and lion’s mane for relaxation. Happi Nightcap, infused with CBN and reishi mushrooms to promote sleep, serves as an alcohol-free bedtime sendoff. Meanwhile, Happi’s THC-only flavored seltzers cater to social occasions that lean toward hanging out with friends. With a clever interplay of color and stylized graphics, each variety gives visual cues about its purpose that are identifiable at a glance despite their subtle delivery.

Since they have limited options for retail marketing, established brands realize the best way to drive market adoption is to address consumer issues through the messaging on their packages. Some brands employ playful slogans to guide shoppers through the novelty of consuming cannabinoids in food and drink. Cann suggests occasions to enjoy its drinks by using packaging callouts like, “Take me to a party!” Wynk nods to alcohol alternatives, stating, “It doesn’t have to be such a dry January.”

Hurwitz agreed on-package education is essential. “We find people are curious about the blends and formulations, so including educational content on the side panels is critical,” she said.

Start simple, then expand

According to Brightfield Group, the top reasons consumers hesitate to purchase hemp-derived-THC beverages include uncertainty about legality, concerns about side effects, dosing confusion, and not knowing how the product will make them feel. Mainstream consumers may be curious about THC but often feel intimidated by the acronym itself, much less the breadth and variety of products marketed with confusing names, unfamiliar ingredients, and sometimes indecipherable (at least to the uninitiated) jargon. That’s why starting with approachable formats, flavors, and doses is key.

“Getting consumers to try THC products is already a marketing challenge,” Craven said. “Introducing [new products] with unfamiliar flavors and ingredients only makes it harder.” He advised brands to “make a mainstream, approachable drink to ease the curious into THC beverages. Incremental innovation is the tactic that always seems to win.”

Hurwitz agreed. “A year ago, especially in Minnesota, retailers and distributors asked us to remove information about CBG and CBN from our packaging because consumers didn’t understand it,” she said. “This year, they’re asking us to add more.”

That said, Craven encouraged brands to be cautious about giving consumers more information than they want or need. “Similar to coffee nerds or bourbon snobs, the cannabis industry has its passionate group of people who geek out on cultivars and extraction methods and think the rest of the world cares. They don’t,” he said. “Consumers don’t want to know whether a specific strain contains limonene and myrcene or was greenhouse-grown [and manufactured] using solventless extraction. They just want to take a gummy and relax.”

Potency is another area cannabis brands should approach cautiously. Unlike in the dispensary market — where potency can soar as high as 1,000 milligrams of THC per bottle or can — most hemp-derived beverage brands have opted for a low-and-slow approach to dosing, typically offering drinks with 2.5 to 10 milligrams of THC per container. “Seventy percent of our consumers choose five-milligram drinks,” Hurwitz said. “But we also have a lot of consumers who want to trade up to ten.”

Container size also is a crucial factor in encouraging consumers to feel comfortable with infused beverages. Happi’s core demographic — primarily women aged thirty-five to fifty-five — embraces the brand’s 2.5- and 5-milligram drinks that come in small, eight-ounce cans, which are easy to tote in a purse or carry to social gatherings. “A lot of thought went into the can size and how we assumed the consumer would experience it,” Hurwitz said.

The decision to use a smaller container was intentional for Happi Nightcap, too. “If you’re drinking our Nightcap before bed, you don’t want to put a lot of liquid into your body and risk midnight trips to the bathroom,” Hurwitz said. Meanwhile, the brand’s ten-milligram drinks are packaged in twelve-ounce cans, because the larger liquid volume helps mask hemp’s natural bitterness, which new-to-cannabinoids consumers may find off-putting.

Rethink manufacturing and launch

The majority of infused beverages in both the cannabis and hemp spaces are seltzer-based, because those formulations are the least complicated to make and test. That generally means they’re less expensive to produce, as well. But the world would be dreadfully boring if every beverage had fizz. Consumers also enjoy infused coffees, teas, and lemonades, which require specialized manufacturing equipment. “If you’re making a coffee-based beverage, you need retort processing,” said Tom Cortez, chief executive officer at Emergent Beverages, founded by beverage- and alcohol-industry veterans. “If it’s a tea product, tunnel pasteurization is required.”

Because manufacturing and distribution are where many startups stumble, Cortez advised extreme due diligence when considering manufacturing partners. “Before we do business with a manufacturer, our team flies in and walks the facility to understand their operation, sanitary conditions, requirements, scaling capabilities, and shortcomings,” he said.

A brand’s go-to-market strategy also influences manufacturing decisions. Some facilities can produce up to 1,600 cans per minute, while others offer smaller, limited runs — an option that, while more costly, allows emerging brands to test consumer response before scaling. Another critical consideration is location. Strategically locating manufacturing facilities near key markets can significantly reduce shipping expenses. Cortez explained, “We like to produce where we sell to minimize back-end costs such as warehousing and distribution.”

For many hemp-THC beverage brands, direct-to-consumer (D2C) sales offer a low-barrier path to market. Without the limitations of cannabis retail, D2C provides immediate marketing feedback, builds brand loyalty, and generates sales data that later can sway retail buyers. D2C can be an especially effective strategy for brands looking to test the market before making significant investments.

According to Hurwitz, Happi launched its beverage line in 2021 using the D2C approach, amassing 80,000 subscribers on its website before transitioning into bricks and mortar — a process made easier by strengthening its pitch to retailers with strong e-commerce sales data. The built-in customer base now drives sales and foot traffic to the brand’s retail partners. Today, Happi sells through traditional retail outlets in ten states and primarily distributes through Anheuser-Busch’s network, proving a strategic D2C launch can lead to large-scale retail expansion.

Brēz also leveraged the D2C model. In May, founder Aaron Nosbisch shared his company’s first-quarter 2025 performance: Two years after launch, the company maintained 12,000 active e-commerce subscribers and reported quarterly revenue of $2.21 million. He attributed 83 percent of his company’s sales to D2C and 17 percent to traditional retail.

Happi’s complete product line includes a variety of hemp-derived THC beverages tailored to different occasions, each paired with its fresh fruit ingredients.

Move into storefronts strategically

Retailers sell brands—they don’t build them. Convincing a retail outlet to stock a new product is no easy task, but demonstrating a strong sales history, a robust marketing strategy, and consumer demand can help. Retail buyers look for products that create buzz and drive foot traffic. For new brands, securing shelf space often requires a mix of strategic outreach, strong branding, and financial incentives. Offering in-store promotions, samples, and competitive margins can tip the scales in your favor and encourage retailers to take a chance on your product.

Getting in the door at major national liquor chains like Spec’s, ABC, and Total Wine & More typically requires a distributor relationship. In addition to warehousing, shipping, and sales, distributors also leverage their relationships with key accounts to negotiate shelf space. Distribution can be complex but, again, solid D2C sales data and consumer demand can help seal the relationship. “It can take months of discussions to get a brand launch just right — from brand positioning to navigating local regulations,” Cortez said. He recommends starting small and scaling up. “Taking a targeted, regional approach is often the smartest path to growth, because you can gain valuable insights at a regional level to refine branding and sales strategies,” he said.

While liquor stores are an obvious fit, convenience stores may offer a much bigger growth opportunity. “Intoxicating hemp beverages are a hot topic in convenience, and the area is a must-watch for our industry — very reminiscent of the early days of vape, but with major distributors and wholesalers already engaged,” said Melissa Vonderhaar, a convenience store veteran and industry expert. “Conversations around responsible marketing and sales are happening, and [widespread adoption is] coming fast.”

She shared key insights into the category, highlighting how convenience stores could be a pivotal launch pad for hemp-THC beverages:

Convenience stores check more IDs daily than airport security checkpoints and must remain strict about age-restricted products.
Of the 152,000 convenience stores in the U.S., 90,000 are single-store operations—many of which are willing to take risks on emerging product categories.
With 70 percent of customers passing by the cold vault and 60 percent purchasing a drink, convenience stores serve as a key research-and-development channel and trial market for beverages.

“This category is going to be big,” Vonderhaar said. “Convenience is the best channel for testing this new space and will play a crucial role in taking hemp THC mainstream.”

Understand the risks, but seize the moment

Nevertheless, legal uncertainties have kept THC drinks out of major trade events and encouraged most retailers to remain cautious. The regulatory landscape for hemp-derived THC beverages varies significantly across states, creating a complex environment for brands to navigate. Some states have implemented strict testing and labeling requirements, while others have enacted outright bans on intoxicating hemp.

As of mid-2025, at least eighteen states had enacted bans or strict regulations on hemp-derived products. States like New York, Colorado, and Oregon prohibit selling the products altogether, while others have imposed tight restrictions on formulation, labeling, and sales channels. A bill awaiting the governor’s signature in Texas would outlaw possession and sale of all intoxicating hemp-derived products starting in September.

The patchwork of state regulations makes compliance complex and expansion risky — particularly for brands hoping to scale nationally. Compounding the issue, rumblings in Congress indicate federal legislators may redefine legal hemp in the new five-year agriculture bill considered must-pass legislation this year. Under consideration is an amendment that would ban all intoxicating cannabinoids and prohibit synthesized compounds that don’t occur naturally in the plant. The language represents a stark reversal of the 2018 Farm Bill that legalized hemp with less than 0.3 percent THC.

Despite promising sales, investors remain cautious about the hemp beverage sector. According to Patrick Rea, managing director of Poseidon Garden Fund, “Beverage startups are capital-intensive and carry lower margins than other CPG sectors, so there must be capital, infrastructure, and expertise to scale these companies to a point where exit multiples generate investor returns.”

He also emphasized the high capital demands of building a national or global brand. Brands must scale rapidly and efficiently to minimize dilution and maximize returns for both founders and investors. With the rare exception of Canopy USA acquisition Wana Brands, which launched a line of hemp-derived beverages in August 2024, that hasn’t happened yet. “Until recently, THC beverages accounted for less than 5 percent of total state-legal cannabis sales in dispensaries,” he said. “The category has experienced slow growth, slim-to-negative margins, and rare exits.”

Nevertheless, Poseidon remains very interested in the space. “The growth of THC beverages is expected to contribute to a decline in alcoholic beverage consumption, and we foresee opportunities emerging across all beverage subcategories,” he said. “While high-dose [cannabis-infused] THC beverages have historically dominated the market, low-dose, hemp-derived options are now gaining traction. We believe [merger and acquisition] interest from mainstream acquirers is what unlocks returns for investors in the THC beverage sector.”

Even if investors aren’t quite ready to jump at the opportunity, the cultural shift is undeniable. Emergent Beverages’ Cortez is among the optimistic vanguard. “I feel the infused beverage sector is a generational opportunity and will emerge as a new adult beverage category that consumers will continue to incorporate into their consumption occasions,” he said. “It is a viable category, different from alcohol.”

For cannabis brands looking to diversify, there may never be a better time to segue into hemp-infused drinks. However, the opportunity may evolve significantly depending on future legislation. In addition to the Farm Bill’s uncertain future, potential federal marijuana legalization could reshape how both hemp and cannabis are taxed, regulated, and sold. Brands entering the hemp space now may gain a crucial first-mover advantage in consumer recognition and loyalty, but they should build flexibility into their strategies to adapt as the legal landscape shifts.

“}]] Hemp-derived THC beverages are hitting mainstream shelves. Here’s why cannabis brands are joining the pour.  Read More  

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