THC Beverages Are Driving Cannabis Growth, Why Distribution Will Decide the Winners

The conversation around THC beverages has shifted beyond hemp versus cannabis. At the IgniteIt Cannabis Capital Conference in Chicago in June, industry leaders said the category is changing how consumers experience cannabis. However, questions around regulation, potency and retail access still arise.

Moderated by Ian Dominguez, the founder and chief investment officer at Delta Emerald, the panel featured Scott Vasterling, founder of Humboldt Family Farms; Caroline Henry, VP of government and regulatory affairs at Buckeye Relief; Hirsh Jain, founder of Ananda Strategies; and Sean Scadron, the senior director of business development at Surfside.

Does Demand Drive THC Beverages?

Dominguez kicked off the conversation by highlighting the industry’s fixation on hemp versus cannabis.

“On a long enough time horizon, we’re going to be talking about THC beverages,” he said. “Whether it comes from hemp or cannabis… doesn’t really matter. What I’m more focused on is the consumer behaviour that demands a beverage.”

According to Henry, beverages have done something cannabis has struggled to achieve for years.

“The hemp industry did manage to break through the stigma when it comes to beverages,” she said, adding that consumers can now find THC beverages in grocery stores, gas stations and convenience stores.

“I could walk into my local grocery store and pick up a hemp beverage if I wanted, and no one thought anything of it,” Henry said.

She explained this product category is introducing new consumers to cannabis in a way dispensaries often are not able to.

“Maybe this wasn’t the cannabis they’ve always been afraid of,” Henry said. “Maybe this was a great alternative to alcohol.”

THC Beverages Is Tool To Reduce Cannabis Stigma

Jain shared this stance, agreeing that beverages are helping change public perception. “Beverages are a unique medium through which we can overcome the stigma that exists against THC,” he said.

He also addressed the issue of whether the current dispensary model can keep up with demand.

“The restrictive dispensary model that exists today is not an adequate way to satisfy the demand that exists for THC in this country,” Jain said.

The conversation also highlighted alcohol’s expanding role in the category. Alcohol companies are already entering the space, Scadron said, adding that cannabis businesses should be paying attention.

“It’s not a matter of if or when alcohol enters the space,” he said. “It’s a matter of who owns the customer relationship.” In terms of branding, traditional beverage companies should be a role model for cannabis businesses. “Cannabis has a lot to learn from alcohol in terms of brand building,” Scadron said.

For Vasterling, the discussion reflected his experience as a California operator trying to build a beverage business. “We’re seeing this normalization of cannabinoids, and I think that’s a really exciting moment for the industry,” he said.

Humboldt Family Farms entered the beverage business because low-dose products are difficult to find in California, Vasterling explained. Another obstacle is the fact that current regulations also prevent the company from using its own cannabis in some beverage products.

“As a low-dose beverage consumer myself, it’s really hard to find in California,” Vasterling said. “As soon as they do, we will be putting our products into these beverages.”

The discussion also touched on potency limits.

Jain said most cannabis drinks sold in California dispensaries have over 10 milligrams of THC, which raises questions about proposals to limit adult-use cannabis drinks to 10 milligrams.

“I think it would be tragic if low-dose beverages no longer continue to exist because there was not demand for them in the dispensary channel,” Jain said.

Henry said Ohio is facing similar changes. She warned that licensed cannabis businesses could miss out if they are excluded from the growing beverage market. “We’ve been complying with ridiculous regulations,” she said. “And here we are, finally, with this huge opportunity…If we only limit them to dispensaries, we’re going to kill the product.”

The debate over THC beverages is far from settled. As regulations evolve and new distribution models emerge, the industry’s biggest questions will continue to shape investment, retail strategy and consumer adoption.

Those conversations will continue at the next IgniteIt Cannabis Capital Policy Summit on November 18, where Wall Street meets in Washington, D.C., where operators, investors, regulators and industry leaders will explore the future of cannabis beverages, interstate commerce, capital markets and the policies driving the sector’s next phase of growth.