EDITOR ' S NOTE

Kyle Swartz Editor, Off-Premise

Last year was a difficult business environment for beverage alcohol retailers. Younger generations now drink less, while even regular customers felt the pinch from a stubbornly tight economy. However, one bright spot was hemp-derived cannabis drinks. Thanks to a( former) loophole in the 2018 federal Farm Bill, producers could legally extract small amounts of THC from hemp plants, and then blend those psychotropic agents into beverages that shipped across the country.

These products proved popular, a bright spot for liquor stores amidst a challenging year. Business boomed. THC drinks sections in stores expanded exponentially. Endcaps became entire aisles, showcasing the many brands that popped up in this space. Helping fuel this growth were improvements in flavor. Five years ago, these drinks largely tasted like bong water. Or producers masked that natural THC bitterness by dumping in sugar. Neither was palatable. Now, after advances in flavor, cannabis drinks taste nearly like any other canned cocktail. Everything in this industry pointed upwards.

Then came the bad news. As part of the deal to reopen the federal government following the long shutdown in 2025, legislators scheduled the hemp loophole to close. If parties cannot resolve this issue by early 2026, THC drinks will become federally illegal. Producers could only operate in their state, and only if their state allowed recreational pot.

This is an enormous step backwards for a burgeoning industry. Especially one that had helped beverage alcohol retailers achieve profits during a down period.

Hope remains. While flourishing, the industry was admittedly in need of scrutiny. As it existed in a loophole, there are basically no rules governing production. Proper regulations are required. So too are THC caps. Some states already limit cannabis content to three to five milligrams. Others do not, permitting cans with 50 or even 100 milligrams. Banning those high-THC products seems reasonable.

I believe that there’ s too much money in this industry for Washington DC to deal it a death blow. In the next year, we will see something work out legislatively. However, my fear is that politicians will try to shift the sales of THC drinks to dispensaries instead of liquor stores.

This would be an enormous mistake. Dispensaries do not have or want the space or cold cases needed for these products, while liquor stores are experts in selling controlled beverages. And losing those sales now is extra hurtful, given lagging categories elsewhere in the store.

I hope that our government does the right thing soon and passes proper legislation governing this industry.

Beverage Group Vice President Jeremy Nedelka Tel: 763-383-4413 email: jnedelka @ epgacceleration. com

Editor, Off-Premise Kyle Swartz Tel: 763-383-4447 email: kswartz @ epgacceleration. com

Trade Managing Editor Krystina Skibo Tel: 763-383-4419 email: kskibo @ epgacceleration. com

Contributing Editors Melissa Dowling, Marnie Old

National Account Director Debbie Rittenberg Tel: 763-383-4455 email: drittenberg @ epgacceleration. com

Sales Associate Sherai Falcon sfalcon @ epgacceleration. com( 763) 383-4423

Associate Managing Art Director Nicole Siewert

Senior Product Manager, Data & Insights Marina Velez Tel: 763-383-4453 email: mvelez @ epgacceleration. com

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4 Beverage Dynamics • Spring 2026 www. beveragedynamics. com