THC Beverage Sector Is 'Probably Bigger Than We Realize,' Say Industry Experts And It's Not Too Late To Get In

The THC beverage sector is projected to grow to $500 million by 2026, from $180 million in 2021, according to BDSA Analytics. With this part of the marijuana space growing very fast, is it too late to join? Is it complicated in terms of regulations? Are hemp drinks becoming a substitute for alcohol? 

Answers to these and many other important industry questions were provided by experts in the space at the recent Benzinga Cannabis Capital Conference in Florida. Drea Groeschel, founder and CEO of Better Than Booze; Aaron Nosbich, founder and CEO of BRĒZ: Ben Meggs, CEO of the Bayou City Hemp Company and Brandon Harshbarger, president of Cheech and Chong Global Holdings all shared their expertise. The panel,  "THC Beverages A New Twist On A Familiar Form Factor," was moderated by Lorena Beltrán, co-founder and CEO of CannabiSalud.

See Also: In 2024 Minor Cannabinoids And THC Beverages Expected To Boom

Hemp As A Variety Of Cannabis 

"The key thing to know is the difference between hemp and traditionally known as marijuana," Nosbich started the discussion. "They’re both considered cannabis. Hemp has below 0.3% THC by weight. And all of our products have below 0.3% THC. The thing about cans and other products is they’re pretty heavy. So, below 0.3% can contain quite a bit of THC, although most of us have products under ten milligrams. So, that’s the basis that leads to federal legality of our products." 

When it comes to labeling products, whether it is hemp-derived, or delta-9 THC, things might seem even more complicated. Delta-9 has kind of created this brand of itself, said Nosbich, adding that most people don't know that THC's full name is delta-nine tetrahydrocannabinol. "So, no matter if you’re getting it from a joint at the dispensary or from hemp, the delta-9 THC is still delta-9 THC. I think most of us call it THC."  

Meggs agreed, adding that on all Bayou City Hemp Company's cans, it says just THC.

Nosbich continued,  "And then we refer to it often as cannabis as well, because hemp is a variety of cannabis with low THC." 

Where are these products being sold? 

Distribution Is King

For Meggs, "distribution is really king," and that's where the business is really moving. His business is focused both on off-premise and on-premise. Under off-premise terms are considered places where beverages can be bought, but not consumed like liquor stores and grocery stores, while on-premise are those spaces where marijuana beverages can be consumed like special bars, restaurants, clubs, or venues. 

"On-premise for us has really been a big piece, surprisingly, of our business," Meggs. "I think it’s 30% of our THC business." 

Groeschel pointed out the importance of education as consumer preferences develop. "Someone might be buying alcohol, they might be buying a non-alc, but they're also buying a THC beverage," she said. "And, we're  finding that this mass consumer is really enjoying a variety of of beverage options." 

Nosbich said that people who go to dispensaries are usually looking for high-dose cannabis, not a low dose, that's why THC beverages make up only 2% of all dispensary sales.  

"So the market that we’re actually selling to is, not even really cannabis users, but more canna-curious," he said. "Even for BRĒZ, about 80% of our customers have rarely to never use cannabis before they use our products, which is an exciting number to hear because that leads to new people entering the cannabis market, which means more people heading into a dispensary. So this hemp category is really expanding the whole industry rather than retracting from it, which is a very important delineation." 

Learn more about this sector while keeping your own cannabis business on track and raising at Benzinga’s New Jersey Market Spotlight on June 17. Network with key industry players, hear from the top operators and close deals that will shape the future. Act now— spots are filling fast. Get your tickets here.

Moving Fast, But It's Not Too Late To Get In 

Harshbarger said that we are just starting to see a significant presence in various social establishments, where it becomes recognizable instantaneously. "And when you’re into that level of sales and growth, the compliance follows you. Like there will not be bad operators at that level. You know, we’re holding ourselves to a much higher standard than I think people even realize." 

On the idea that cannabis is going to be a big alcohol killer, Nosbich said that no one is replacing their six-pack on the weekend, it's a different 30-pack. There have been reviews of people who said to have replaced alcohol with a THC drink, and "that's real impact. This is a lot bigger than most people realize. It’s probably bigger than we realize. To put this in perspective, Monster Energy, which I’m sure many of you are aware of, is a $60 billion market cap company. They sell green water with caffeine in it. How much is cannabis in a can?" 

Nosbich stressed that people also don't realize how fast this industry is moving. "Target TGT, for example, is now taking adaptogenic mushrooms," he said adding that it is not too late to get into this game and it’s not as complicated as it might seem. After all, "hemp licenses are much more affordable than cannabis licenses." 

See Also: Experts Discuss Botanical Psilocybin’s Effect On Neurogenesis And More At Benzinga Cannabis Conference

Photo: Quentin Dupree for Benzinga