- THC drinks are booming, but a looming federal crackdown threatens the industry.
- THC beverages generated $239 million in measured U.S. retail sales in the 52 weeks through April, up 135% from a year earlier, according to NielsenIQ.
- Distributors are pulling back from restocking THC drinks as brands fight back against a potential product ban.
THC beverages for sale at Urban Flower, a CBD and THC dispensary in Houston, Texas, Oct. 28, 2022.
Elizabeth Conley | Houston Chronicle | Hearst Newspapers |
Erica Fabian says THC-infused drinks have become an alcohol alternative that have made a profound difference in her family.
“Drinking [alcohol] is not healthy for both myself and my husband,” said Fabian, a business owner and military spouse.
Her husband, a retired 20-year Navy SEAL veteran
Her husband, a retired 20-year Navy SEAL veteran with severe post-traumatic stress disorder, has found THC beverages particularly helpful, she said.
“It’s an actual game-changer,” Fabian said. “I’ve seen it with my own eyes.”
But now, uncertainty around the category is creating concerns that it could become harder to get those beverages. Congress this weekonce again pushed off a federal crackdown on hemp-derived THC products, which companies have sold for years through an existing legal loophole even though recreational cannabis use remains illegal at the federal level.
The House on Tuesday passed a stopgap spending measure that, in addition to keeping the U.S. government funded, delays new federal restrictions on hemp-derived THC products from Nov. 12 to Dec. 11. The measure buys the hemp industry another month to persuade lawmakers to create a regulatory framework to allow the continued sale of those products rather than ban them.
The stakes are growing as consumer demand booms.THC
The stakes are growing as consumer demand booms.THC beverages generated $239 million in measured U.S. retail sales in the 52 weeks through April, up 135% from a year earlier The data tracked more than 1,170 products across more than 200 brands
Though the drinks are legal for now, the prospect of a ban has already affected beverage makers.
Jake Bullock is the CEO of THC beverage maker Cann, which he said has become the top-sellingTHC drink at Target and the No. 2 nonalcoholic beverage at Sprouts. He said the company is seeing record sales to retailers, but a sharp pullback from wholesalers who are trying to avoid being stuck with inventory if Congress bans the product.
“Our distributors should be buying more from us, but they’re not,” he said.
Joe Gerrity, CEO and co-founder of hemp beverage
Meanwhile, Joe Gerrity, CEO and co-founder of hemp beverage manufacturer Crescent Canna, said his company hasalready laid off half of its employees because of how congressional inaction has affected the business this year.
Congress approved a measure as part of its government funding bill in November 2025, initially giving companies until this November to comply with new restrictions on intoxicating hemp products that had been allowed under the 2018 farm bill.
“Nine months after passing a bill that would kill tens of thousands of small businesses, Congress has come together and done something tremendous — given themselves an additional month to solve a problem that they created” Gerrity said.
I want to celebrate, but it shouldn’t take
“I want to celebrate, but it shouldn’t take an army of lobbyists and tens of millions of dollars for Congress to protect small businesses from Congress,” he added.
Other, smaller brands face a potential supply-chain squeeze on the horizon.
For now, retailers can keep selling the drinks and consumers can continue buying them, but distributors may become increasingly reluctant to replenish inventory while Congress debates the category’s future.
“Many distributors are requiring documentation stipulating manufacturers will take back and reimburse them financially for any product unable to be sold due to regulatory changes,” said Gerrity. “This is an unprecedented situation, and nobody wants to get left holding the bag.”
Bullock said Cann is making a bet
Bullock said Cann is making a bet that Congress will reach an agreement on regulation, and is building inventory in anticipation of continued demand.
High rise for THC beverages
Many consumers have found THC-infused beverages to be a welcome alternative to alcohol, in particular because they contain lower levels of the psychoactive compound than traditional marijuana products do. The industry’s opponents in Congress, however, argue that uncertainty around the safety of the relatively new beverages makes a ban the safest option.
Rep. Andy Harris, R-Md., has been among the leading House Republicans pushing to bar hemp products from being sold, arguing that intoxicating hemp products are unregulated and pose risks to children.
The debate extends beyond hemp-derived beverages to other
The debate extends beyond hemp-derived beverages to other intoxicating products sold under the hemp label.
Other critics in Congress have focused on products that can be inhaled and high-potency candy products, as well as the lack of THC caps and testing requirements for those products. They have also expressed concerns about items containing synthetic cannabinoids.
Bullock, however, said the beverage industry’s goal isn’t to preserve a regulatory vacuum, but rather set up new rules governing the products similar to the alcohol industry.
We’re winning against an abolishing argument, he said,
“We’re winning against an abolishing argument,” he said, adding that Congress is “not worried” about drinks containing lower-milligram dosages of THC.
Every time Congress extends the deadline, businesses question how much product they should make for distributors, making it hard for them to plan ahead, Bullock said.
For consumers like Fabian who can see the beverages as both a recreational and wellness option, the stakes are more immediate.
“If there is a responsible way to regulate it, I absolutely think that is the way to go,” she said.
Source: www.cnbc.com
