Over the past few years, the traditional happy hour has undergone a seismic shift. What was once a space for friends to get together and have a few beers has evolved into consumers spending time with others while holding a “socially sessionable” beverage.
Driven by an expanding consumer demand for alternatives to traditional alcohol, cannabis-infused beverages have taken the lead in this category, with the global cannabis beverage market projected to climb from $3.57 billion in 2025 to nearly $15 billion by 2035, according to Precedence research.
The alcohol industry is no longer just watching from the sidelines — it is evolving to survive. From craft breweries pivoting to hemp-derived infusions to big-box retailers like Target testing the waters, the line between the liquor aisle and the cannabis cafe is blurring, permanently altering the DNA of how the world toasts to the weekend.
The Merging of Two Industries
Conversations of the infused beverage market have filtered through conferences such as the National Beer Wholesalers Association’s 88th Annual Convention and the National Alcohol Beverage Control Association’s Administrator’s Conference, among others. Cannabis beverages aren’t going anywhere anytime soon, and beverage alcohol companies and organizations are working hard to make sure both industries can come together seamlessly.
Rebecca Maisel, outgoing chairwoman for NBWA, shared during a General Session just how hard wholesalers have worked to adapt to this new market during the organization’s 88th Annual Convention.
“We’ve seen growth in RTDs, non-alc’s and hemp-based THC beverages,” she said. “We’ve also seen newer entrants to the beverage arena, like wellness-focused functional beverages containing nootropics and adaptogens. The good news is that wholesalers are adapting, diversifying and expanding our capabilities to offer retailers the best and safest products.”
While many beverage alcohol companies were uneasy about cannabis drinks when they first started becoming mainstream, they now see the advantages that these products can offer the industry.
Consumers want cannabis beverages, and they’re going to liquor stores in legal states to buy them.
Mike Moreno, co-owner, Moreno’s Liquors in Chicago, IL, says the store has an entire endcap dedicated to THC beverages, with sales doing relatively well.
“We’ve had THC beverages for at least two years now,” he says. “We started off with CBD products, which were doing relatively well. When they began allowing places to bring in THC, we were a little hesitant at first, but then we started integrating it into our business model this last year.”
Moreno’s Liquors has been adaptive to the change in consumer drinking preferences, changing up their shelves to match market shifts. The store recently reformatted their craft beer aisle to include an endcap for THC drinks.
“Our number-one seller would be Marz. Marz Brewing also makes THC beverages that are incredibly popular here in the Chicagoland area,” Moreno notes. “But we also have Cheech and Chong, Breeze and Cantrip, among many others.”
Minnesota has also become a hotbed for THC innovation in beverage alcohol retail stores, led by the Minnesota Municipal Beverage Association. Executive Director Paul Kaspszak said during a panel at the NABCA Administrator’s Conference in October 2025 that some liquor stores have begun selling edibles as well, everything from gummies to cookies. Edibles now represent about 27% of THC sales for Minnesota beverage alcohol stores that carry them. But the big draw remains drinks.
“Liquor stores have become the largest seller of THC drinks,” Kaspszak said. “You can still buy them at dispensaries, but people gravitate towards the liquor stores because you have the larger selection there.”
The category has proven so successful that the Minnesota Municipal Beverage Association has even canned their own house brand, Muni Sota. Additionally, consumers can now buy THC beverages at certain on-premise businesses.
“It’s not widespread yet, but it has saved numerous craft breweries,” Kaspszak said. “A lot of them have started to produce THC drinks. It’s keeping them afloat.”
Target stores in Minnesota have even begun testing sales of hemp-derived THC drinks. Sales began in early October 2025, with brands such as Cann, Wynk, Señorita and Wyld, among others, available in select Target locations in the state. The beverages are capped at 5mg per serving.
“There are some studies out there that suggest that THC is not necessarily a replacement for alcohol. It can be a supplement and a compliment to consumers’ alcohol choices,” says Jim Higdon, CCO and co-founder at Cornbread Hemp. “Consumers are just adding THC beverages to their menu of options.”
The reality is that consumers are purchasing these infused beverages, and by selling them at on- or off-premise beverage alcohol locations, it can greatly enhance your bottom line.
New Bill Threatens the Hemp-Derived THC Industry
Sitting amongst the cannabis-infused beverages on store shelves are hemp-derived THC drinks, which include Delta-8 and Delta-9 THC.
As described in an article by Robert Shade on thehempdoctor.com, hemp-derived Delta-9 THC, or simply THC, is extracted from industrial hemp — a type of cannabis containing less than 0.3% THC by dry weight, and thus is federally legal under the 2018 US Farm Bill, now called the Agriculture Improvement Act of 2018.
On the other hand, “marijuana-derived Delta-9 THC is sourced from marijuana, a type of cannabis plant with notably high THC content and contains beyond the allowed 0.3% THC by dry weight limit,” according to the article.
Products made from Delta-9 extracted from marijuana are prohibited at the federal level. At the state level, marijuana-derived Delta-9’s legality hinges on state regulations for medical and recreational programs.
While marijuana-derived THC products are protected by state medical and recreational programs, hemp-derived THC products are now at risk of being banned due to a new funding bill, based on language introduced by Kentucky Senator Mitch McConnell.
Buried in the bill is language that will recriminalize most consumable hemp products, restrict the legal definition of hemp and impose a 0.4 milligram cap on total THC per container. It also expands the definition of THC to include Delta-8, Delta-10 and other isomers, along with any cannabinoids marketed as having similar effects.
According to the funding bill, a full ban will go into effect on November 12, 2026. Intoxicating hemp-derived products will be barred from interstate commerce but permitted for intrastate sales as regulated by the respective states.
Over the last three years, hemp-derived beverages sales have exploded, with Texas reporting in a recent economic report $5.5 billion of annual revenue and major multi-item retailers such as Target, Circle K and Total Wine vigorously stocking them.
“THC products’ dosage is measured by milligrams (MGs) of Delta-9 THC ranging from: 1-2.5 MGs ‘Microdose;’ 3-5 MGs ‘Low Dose;’ 10-15 MGs ‘Moderate Dose;’ 20-30 MGs ‘High Dose;’ 50-100 MGs ‘Acute Dose’ and 100-500 MGs ‘Macrodose,’” Steven M. Schain, of counsel, Malkin Law, says. “As hemp-derived intoxicating beverages are sold exclusively to those 21 and older usually at the Low-Dosage and Microdose level, the Act wildly overshoots its target and obstructs a safe and profitable business.”
“The new provision will destroy thousands of small businesses, gut farm income across rural America and push millions of consumers into the black market — where safety, transparency and accountability vanish entirely," adds Edibles.com’s EVP and general manager Thomas Winstanley. "This is yet another unintended consequence of [McConnell's] political actions, albeit far worse."
“This is policy malpractice: a short-sighted, politically motivated move that creates exactly the public health crisis [McConnell] claims to prevent,” he continues. “Instead of regulation, this is recriminalization, and it serves as a blueprint for chaos.”
How Can Brands and Retailers Prepare?
Although enacted, the hemp-related provisions in the federal funding bill don’t take effect until November, providing a one-year transition period for states, businesses and industry stakeholders. And while this is plenty of time for brands to get acclimated, there’s still a lot of ground to cover.
THC-infused beverage brand Uncle Arnie’s is planning for innovation, compliance and consumer demand in light of the ban, “by planning for multiple regulatory scenarios, developing compliant formulation options, strengthening testing and traceability, educating consumers and partners, and exploring product innovations that keep the brand fun, safe and competitive regardless of federal changes,” says the brand’s CEO Theo Terris.
However, Terris brings up an issue that could potentially cause consumers to run back to the illegal market.
“The real issue is that 0.4mg makes the products essentially non-intoxicating, like an NA beer with trace alcohol, which wipes out the category’s purpose,” he says.
“In the interim, businesses should closely monitor regulatory developments and enforcement trends,” adds Paula Savchenko, Esq., founding partner of Cannacore Group and PS Law Group. “Conducting internal reviews of product formulations, cannabinoid synthesis pathways, serving sizes and supply-chain documentation will help identify necessary compliance steps. Strategic decisions regarding formulation, licensing, contracting and commercial agreements will be important for risk mitigation. The next year will also be significant for advocacy and lobbying efforts at the local, state and federal levels, as the industry seeks clarity and balanced regulation.”
Due to the industry backlash that the federal funding bill received, in January of this year, Representative James Baired (R-IN) introduced a bill that would give the hemp industry two more years before a federal ban on THC products would take effect.
The legislation, H.R.7010, would extend the current one-year delay of the ban to three years, pushing implementation to November 2028. This would allow thriving hemp brands to continue operations and provide more time to establish proper regulations for the industry to avoid an outright ban.
“The extension of the effective date from one year to three years provides much-needed stability and predictability for hemp brands and the broader supply chain," says Michelle Bodian, general counsel and head of regulatory affairs at Nowadays. "Establishing a durable federal framework is complex and requires coordination across agencies, scientific review and agricultural planning. This additional runway recognizes that reality and allows policymakers the time necessary to develop consistent, practical standards. For businesses, retailers and consumers, it creates near-term certainty.”
According to Bodian, at this stage, the proposal needs to move through the standard congressional process, including passage by both chambers of Congress, before being signed into law.
In the meantime, the best thing that brands and retailers can do is remain compliant.
“I think that the best approach for the industry right now is to have a high degree of compliance,” says Dr. Ziv E. Cohen, founder and medical director of Principium Psychiatry. “Compliance equals competitiveness. So, if you sell a product that has excellent labeling, sourcing, reliable dosing and good education about the item, you’re going to succeed in the market and drive further demand.”
Dr. Cohen also underscores the need for regulation within the industry.
“It’s very similar to the alcohol industry,” he says. “It has many decades of experience with marketing, labeling, age verification, points of sale and where it can and cannot be sold. Ultimately, this type of regulation serves both the industry and consumers well.”
Moreno explains that no matter what happens with the ban, Moreno’s Liquors will continue to remain compliant.
“What seems to sell the best at our store are the 15 mg and 25 mg THC beverages. We would like to continue selling those, but no matter what happens, we just want to make sure that we abide by the law,” Moreno says. “We would also like for legislation to work with small businesses because without small businesses, there is no economy.”•