by KYLE SWARTZ
The rise of legal cannabis in recent years has been a mixed bag for beverage alcohol retailers. On one hand, fears that consumers would start swapping out alcohol for legal pot have proven correct. Especially among younger generations— Gen Z in particular— where alcohol consumption has dipped while THC usage is on the uptick.
On the other hand, as recreational cannabis moves into the mainstream and old stigmas fade, opportunities have emerged for perceptive retailers. One example is THC drinks. These are produced using a loophole in the 2018 Federal Farm Bill that allows for the extraction of small amounts of THC cannabinoids from hemp, which is then infused into canned and bottled beverages. The active psychotropic ingredient in these products range from a mild 2.5 mg to an eye-popping 50 mg or more.
Ask any beverage alcohol retailer nowadays and they’ ll likely say that THC drinks are one of the trendiest sections in the store. Helping fuel this movement is a massive improvement in quality. Even just five years ago, most THC drinks still tasted too bitter, reflecting the unpleasant flavor of their cannabis component. To mask this flaw, many producers would dump sugar into the beverages. But this also turned away customers, who understandably did not want to consume a saccharine“ sugar bomb” with high sugar content.
Thankfully, recent breakthroughs in the lab now allow adding flavoring in THC drinks without overly relying on sugar.
Convenience and form factor are two other important reasons why THC drinks have taken off. Simply opening and consuming a single-serve beverage is far more socially acceptable and inconspicuous than lighting a joint out in public. And we’ re a drinking culture; whether alcohol or nonalc, people enjoy sipping on something while socializing.
Altogether, the result is a category that has exploded in the past few years. Many complications remain, however. Consumer education, overall, is low, meaning that the risk remains for overconsumption. And because these products exist in a legal gray area, there’ s essentially no government oversight, meaning brands can reach retail shelves despite questionable contents.
Also: The loophole that allows for THC drinks can be closed by U. S. Congress at any point. Should federal legislators choose, and there’ s usually at least a handful pushing for it, they can wipe out this fast-emerging industry by eliminating the unintended loophole from the 2018 Farm Bill.
It’ s a tricky market to navigate. Some retailers stay out of THC entirely, while others pick and choose products, preferring those with the best transparency. One state in particular has established a progressive stance towards cannabis as a manageable profit center for liquor stores.
CANNABIS IN MINNESOTA
Minnesota only legalized recreational cannabis in 2023. It’ s hardly a pioneer in that regard. But where the North Star State shines is how quickly and innovatively beverage alcohol retail-
28 Beverage Dynamics • Fall 2025 www. beveragedynamics. com