Unfiltered thoughts from inside the cannabinoid beverage industry.
Getting regulated like alcohol isn't losing. It's growing up.
Last week the Wine and Spirits Wholesalers of America, the distribution arm of Big Alcohol, ran an op-ed asking the cannabis industry to join them in backing regulation over prohibition for hemp beverages. The reflexive read in this space is suspicion: Big Alcohol only wants in because THC drinks are eating into their shelf. Maybe. But look past who's talking and at what they're actually saying, because on this one they're right. Their argument was simple: the market already exists, and the only real question is whether it gets governed by consistent rules. That's not a threat. That's the destination. Here's the part the industry doesn't love to say out loud: no legitimate company building a real brand wants the market we have now. Anyone can put an untested, 100-milligram gas-station drink on a shelf next to the candy, and that isn't freedom, it's the exact thing that gets whole categories banned. The brands doing this right want age-gating, real testing, honest dosing, and a distribution chain with accountability in it. That is, more or less, how the alcohol system works. Treating hemp and cannabis beverages like adult beverages isn't the industry losing, it's the industry growing up, and it's how these products earn a permanent spot on the shelf instead of a spot on the next prohibition list. That may be a minority view in cannabis today. It won't be for long. The real question isn't whether this category gets regulated like alcohol. It's whether we help build that framework or let it get built around us.
Buyers keep asking what belongs on the first door.
Every week a liquor buyer or a dispensary buyer asks the same thing: if I give this category one door, what actually goes on it? Not the brand pitch. The merchandising one. Session seltzers versus tonics versus shots. Hemp versus cannabis. What to require before you cut a PO. We wrote it down. A Retailer's Guide to Stocking THC Beverages is the floor-level version. The rest of the market picture is already on the site. This one is for the person standing in front of a cooler.
Did the 3-Tier Model just stop being hypothetical?
Two members of Congress, coming from different directions, just reached for the same answer on hemp beverages, and it looks an awful lot like the U.S. alcohol model. Manufacturer sells to distributor, distributor sells to retailer, retailer sells to the customer, nobody skips a step. They can't even agree on how to tax it. One bill reads like a jingle: 5 milligrams a serving, a nickel a milligram, 5% off the top. The other keeps the 5mg serving and trades the rest for a single flat rate. But both reach for the same three-tier bones, and when two independent bills do that within weeks of each other, it isn't coincidence, it's direction. A discussion draft is not a law, but the founders who read the direction early will build differently than the ones who don't. The sell-it-from-your-own-site, ship-it-straight-to-the-shelf model most brands run has a clock on it now. That's a hard question even for wider operators, Cannabev included, whose relationships already reach across all three tiers. It also quietly rewrites who owns the customer: when a brand can't sell direct, that relationship migrates to whoever owns the shelf, and more and more, that shelf is a digital one. So sit with this: if the wall between making, moving, and selling becomes law, which side of it is your brand built to live on?
Hemp beverages grew 133% last year. Congress wants to ban them.
Hemp beverage volume grew 133% between 2024 and 2025. Case equivalents went from 692,000 to over 1.6 million. Points of distribution more than doubled. Retail accounts grew from 25,000 to 43,000. That's from the Hemp Beverage Alliance's Future of Drinking Report, released this week. What stands out isn't just the growth, it's the shape. Monthly volume is tracking beer and spirits seasonality, peaking in summer and at year-end. The fastest-growing dose segment is 6-10mg, overtaking 10mg-and-above, meaning consumers are choosing sessionable, social-occasion drinks over max-dose products. This is a category behaving like an established part of the adult beverage market, not a novelty. And mainstream retail agrees. Target started carrying hemp beverages in Texas stores in May. Albertsons is testing them at Jewel locations in Chicago this month. These are the biggest grocery chains in the country betting on the category, even with November 12 on the calendar. That's the disconnect. As HBA president Christopher Lackner put it, "Whether it's a liquor store or a distributor or a supplier of these products, this is a driver of economic success." A category growing 133% while every other adult beverage segment is flat or declining is not a regulatory nuisance, it's an economic engine. And 1.6 million case equivalents is the floor, not the ceiling, because most of that volume is still moving through fragmented, brand-by-brand distribution. Regulate it, tax it, but eliminating a category that consumers are clearly choosing over alcohol isn't protecting anyone. It's leaving money, jobs, and market share on the table.
THC beverages vs. the alcohol slowdown
Gen Z drinks less alcohol than any generation on record, and it's showing up in distributor numbers everywhere. Beer shipments are down for the fourth straight year. "Sober curious" went from wellness-blog buzzword to actual purchasing pattern. The consumers pulling back from alcohol aren't pulling back from social drinking. They're looking for something else to hold at a party, to crack open after work, to order when everyone else is ordering. THC beverages fit that slot in a way that edibles and flower never could. It's a can. It's cold. It's sessionable. You don't need to explain how to use it. Cannabis beverage sales in legal states have grown every quarter for the past two years while overall cannabis sales have been flat or declining. Beverages are the only category consistently gaining share, and a big chunk of that growth is new consumers coming in from the alcohol side who would never have walked into a dispensary for a pre-roll. That's why distribution matters more in beverages than in any other cannabis category. These aren't dispensary loyalists browsing a menu. They're convenience shoppers who want the product cold and on the shelf when they want it, the same way they buy a six-pack. The brands that win this wave will be the ones with distribution infrastructure that meets that expectation across dispensaries, hemp retail, and DTC, not the ones with the best Instagram page and a fulfillment center. The alcohol industry spent a century building the model that moves product to every corner store and bar in the country. Cannabis beverages need something comparable, built for the regulatory patchwork we actually operate in. The consumers are already here.
Why so many THC drinks taste "chemical"
Here's the thing nobody in this category wants to say out loud: a lot of THC beverages taste bad. Not "acquired taste" bad. More of the slightly sour, dry your mouth out, "chemical" bad. That dry, puckery aftertaste at the start or the finish of the sip that makes you set the can down half-finished. There are real reasons for it, and almost all of them trace back to the rush to get THC into a drinkable format before the maker solved the drinkable part. Start with the oil. THC is fat-soluble oil and water isn't, so you need an emulsion to get it to blend evenly into a seltzer or juice base. Those emulsifiers and carriers have a taste, and at the amount needed for a shelf-stable blend, that taste shows up as the dry, tongue-coating finish people describe as "chemical." Then there's the plant itself. Distillate and full-spectrum both carry a green, resinous note that has to be covered, so in come the masking agents to tamp down the bitterness. Next, in an effort to appeal to more health-conscious consumers, many are also chasing zero-sugar, low-cal label copy, a lot of that masking gets done with artificial sweeteners and flavors that leave their own metallic aftertaste. Stack all three and you've engineered the exact drink nobody is drinking for the drinkability factor, it's just a convenient way to consume cannabinoids in a liquid form. Here's what got lost in the lab: people don't drink beverages just for the function. They drink them for the taste. Water is the drink you have when you don't care. Everything else on the shelf earns its spot because somebody actually wants to drink it again. A beverage that nails the dose and misses the taste doesn't get many second orders, and in this business the second order is the whole game. You can distribute a product people love. You can't distribute a reorder that never comes, and taste is still the last and best differentiator in a sea of infused beverage options.
Lemonade is the IPA of cannabis beverages.
There's a reason it seems like every brand has an infused lemonade. Nobody hates lemonade. It's the perfect carrier for cannabinoids: the citric acid masks that green, earthy taste better than almost any other flavor profile, the acidity is naturally anti-bacterial which helps with shelf stability, and you can branch into a dozen fruit variations without leaving the format. We've distributed some fantastic cannabis lemonades, and they move. So yes, lemonade works. The problem is that it works for everybody. When thirty brands are all leading with some version of cannabis lemonade, you've got a cooler full of functionally identical products fighting over the same two inches of shelf space. Retailers have heard the lemonade pitch fifteen times this month. Craft beer went through this exact cycle with IPAs. Every brewery built its identity around hops until they were all interchangeable, and the ones that survived developed a second act. Cannabis beverages are hitting that wall now, except the category is younger and the shelf is smaller. By all means, have a lemonade option as part of your brand portfolio. But also have a plan for both your differentiation strategy and what comes after lemonade.
The co-pack question every national brand is asking
Every week we hear from another out-of-state brand with the same question: "How do we get into dispensaries in [state]?" The answer is the same whether the state is Washington, California, Nevada, or Ohio. You can't ship cannabis products across state lines. You can't sell in dispensaries without a licensed processor manufacturing your product in that state. And in most rec-legal markets, new processor licenses are either capped, frozen, or buried in a years-long queue. So the real question isn't "how do we get in?" It's "who do we partner with?" The brands figuring this out are looking for co-pack relationships with licensed processors who also have distribution infrastructure. One partner handles manufacturing, compliance, sales, and delivery. The brand focuses on what it does best: recipe, marketing, and building consumer demand. That's not a compromise. It's the model. The alcohol industry figured this out decades ago with contract brewing and licensed production agreements. Cannabis is getting there, just slower. If you're a brand with a proven product in one state and you want to be in five, the co-pack-to-distribution pipeline is the fastest path that actually works.
55 brands, 3 cooler doors
There are 55+ active cannabis beverage brands competing for shelf space in Washington dispensaries right now. Most dispensaries have room for maybe 3-5 brands in their cooler. Do the math. Two years ago, being a cannabis beverage was the differentiator. You showed up, the buyer was curious, you got a slot. That era is over. Now it's about sell-through velocity. Buyers don't care about your origin story or your branding agency. They care about one thing: does this product move? The brands winning shelf space today are the ones that can show data. Reorder rates. Units per week per account. Competitive velocity against other beverages in that store. If you're still pitching with a sell sheet and a sample, you're bringing a knife to a data fight. The other thing buyers are telling us: they want fewer vendor relationships, not more. A portfolio distributor who carries five strong beverage brands is a simpler ordering decision than five individual brands each with their own rep, their own delivery schedule, and their own invoice. Convenience wins at the buyer level. Always has in alcohol distribution. Cannabis is no different.
Your hemp brand needs a Plan B
If your business model depends entirely on selling hemp-derived THC beverages at 5mg or 10mg per can, you have about five months to figure out what happens next. P.L. 119-37 caps hemp beverages at 0.4mg total THC per container effective November 12. At that level, there is no consumer-relevant effect. Your product becomes a compliance exercise, not a beverage. Some operators are betting Congress will push the date or raise the cap. Maybe. There's legislative activity, industry lobbying, and genuine bipartisan interest in hemp commerce. But "maybe" is not something you want to stake your entire revenue stream on. The brands thinking clearly right now are building contingency. That means one of three paths: reformulate to comply with 0.4mg (which effectively means pivoting to a different product category), get licensed in cannabis-legal states where you can produce under a state processor license and sell at meaningful doses through dispensaries, or some combination of both. The second option is where the real opportunity lives. If you already have a brand that consumers recognize, and you can produce that same product at cannabis doses through a licensed partner, you've created a dual-channel business that survives any federal outcome. Hemp stays legal and the cap gets raised? Great, you sell in both channels. Hemp gets restricted? Your cannabis channel keeps going. The worst position to be in come November is having only one channel with no backup.
November 12 is coming faster than you think
Despite the seeming "pro-hemp" tack the current White House administration has taken, one clause inserted in the last approved spending bill could be bad news for the hemp industry. P.L. 119-37 sets a hard limit 0.4mg per container cap on total THC, affecting hemp brands in all categories who use any added THC or full-spectrum hemp. At midnight on November 12, 2026, if you're selling a 2mg, 5mg or 10mg hemp beverage right now, your product becomes non-compliant in six months. Some brands are banking on Congress pushing the date or changing the rule in the next 6 months. Maybe they will. But "maybe Congress will fix it" is not a business plan. The brands that survive this are the ones making contingency plans right now: reformulate, pivot to cannabis licensing in key states, or risk having to exit the industry completely. A lot can change politically between now and November but, for now, the cliff is real. Plan accordingly.
One channel is a hobby. Three channels is a business.
Most cannabis beverage brands sell through dispensaries, in recreational-legal states. Period. Some hemp brands sell DTC online. A few do hemp retail. Almost nobody covers all three. But the math is simple: if your entire revenue stream depends on one regulatory framework, you're one rule change away from zero. The brands building across cannabis dispensaries, hemp retail, and DTC nationwide aren't just diversifying -- they're building businesses that can absorb a hit in any single channel and keep moving. Everybody else is hoping nothing changes in the narrow playground they chose for their model. In this industry, that's a bold bet.
Schedule III just quietly unlocked something huge for beverage brands
Rescheduling happened. After years of meaningless talk, medical cannabis has now been officially moved from a Schedule I drug to Schedule III. Most of the press focused on new research opportunities being unlocked or 280E tax relief -- and yeah, that matters. But here's the thing almost nobody's talking about: federal trademark registration. For the first time ever, cannabis brands can register with the USPTO. Think about what that means. Up until now, your brand name was only as protected as your state registration and your willingness to sue. Even big national brands have been building on rented land. Now you can actually own your name at the IP level. If you're a beverage brand and you're not thinking about locking that down right now, heads up. Many companies operating in separate state markets have similar sounding brand names. The first to the trademark office may have a huge nationwide headstart if recreational cannabis moves off Schedule 1 next. Is your brand going to own its identity when the next regulatory barriers fall?
Hemp beverages in dispensaries: the SB 5367 play
Everyone's talking about hemp beverages going into grocery and gas stations. But in Washington, SB 5367 means detectable-THC hemp drinks sell through licensed dispensaries. Same shelf, same buyer, same delivery route as cannabis. If you're already in the dispensary network, hemp is just more SKUs on the same sales call. That's the advantage nobody's talking about.
The "beer aisle" moment is coming
Walked into a dispensary last week and counted 14 different beverage brands on the shelf. Two years ago it was three. The category is exploding, but most of these brands are still doing their own distribution. That's about to change. When the beverage cooler starts looking like a beer cooler, you need a distributor who knows the category, not a generalist moving flower and edibles who happens to also carry your cans.