Seltzers, sodas… and more seltzers?! For anyone first scoping out the hemp beverage market, it may seem like just an endless sea of seltzers and sodas.  While this is true, there are in fact many other flavors and form factors, and they are quickly making their way to becoming mainstream products. Buckle up, because today I plan to provide potentially the most comprehensive report of hemp-derived THC beverage market sub-categories to date.

But before I do, let’s discuss quickly why it seems that everyone and their mother is launching a seltzer. THC beverages have been around since 2017-2018, and for the most part, they have fallen into the soda or seltzer categories. Some of the OG players in the cannabis rec markets like Cann, Levia, and Keef all followed this trend. Then Minnesota legalized THC beverage sales for traditional retail in the summer of 2022, kicking off what I would consider to be the “bull market” of hemp-derived THC beverages. The market followed the same trend: lots and lots of seltzers, and a few sodas.

Despite being a few years old now, why has flavors/form factors outside of seltzers/sodas in the THC beverage market lagged behind? Here are a few insights:

• Easy Formulation: Seltzers and sodas are extremely easy to formulate. Simple shelf-stable ingredients, and a pretty manageable supply chain.

• Sophistication of Co-packers: Most co-packers in the cannabis rec markets are focused on gummies, vapes, and flower processing. Beverage is not their game. They typically buy a few beer tanks and a canning line and set up shop, but they are likely not in a position to handle sophisticated beverage production. In Minnesota, when the new law passed there was a flood of breweries beginning to produce THC beverages. While they are more knowledgeable in beverage formulation and co-packing, this knowledge primarily boils down to one product: beer. Since putting alcohol and THC in the same can is probably asking for trouble, they landed on the next easiest thing they could produce: seltzers.

• Proven Demand: Over the past decade we have seen an explosion of hard seltzer products in the alcohol space. In 2024, Statista estimates that retail sales of the category will amount to $11.4 billion. Consumers love seltzers that get them tipsy, so why not make seltzers that will get them high?

Now that we’ve straightened that out, let's dive in.

I conducted a very rough sub-category report based on the brand catalog from my website (www.drinkhemp.com) to provide a breakdown of what the landscape looks like. For context, I categorized 120 brands by what their main product line was (ex: Artet makes non-alcoholic spirits and mocktails, but their flagship product is their spirit, so they are categorized as such).

Established Categories

Seltzer

Leading Brands: Cann, Cycling Frog, happi, WYNK

Typical THC Dosages: 2.5mg, 5mg, 10mg 

Core Demographic/Time for Consumption: These products have mass appeal, ranging from younger to older drinkers.  With familiar flavors and typically low to no sugar, they also have a strong appeal to the health-conscious audience. Alcoholic seltzers don't seem to be that seasonal and are popular year-round, so I believe these will follow the same trend.

My Take: This sub-category will soon become a race to the bottom, and it will be a battle of whoever has the best taste, cheapest cost, most appealing brand, and most marketing $$ to slug it out in the retail trenches. Cann, Cycling Frog, happi, and WYNK seem to be the leaders in many of these areas at the moment, and all of them have strong brands. If you are launching a seltzer right now, I would advise you to take a step back and consider what your moat/competitive edge will be.

Soda

Leading Brands: Keef, Cantrip, Squared, Mary Jones

Typical THC Dosages: 5mg, 10mg

Core Demographic/Time for Consumption: These products typically skew more toward men or legacy THC users looking for a higher dosage. Americans love soda so these will always have their place, but true mass appeal is tough given the high amount of sugar and the general trend of consumers looking for healthier beverages.

My Take: Keef has dominated the cannabis rec market and they are likely poised to do the same in the hemp market. Cantrip (their Root Beer is incredible) and Squared show promise, and I mainly include Mary Jones because they carry brand equity from being an extension of Jones Soda Co, which is already popular across the US. I am very intrigued by the long-term viability of this sub-category, as Not Your Father’s Root Beer comes to mind as an alcoholic soda brand that had a quick peak and then was promptly forgotten. Taking a page from the booming prebiotic soda market could be a recipe for success, and a THC-infused brand called BUZ POP just recently launched:

Mocktail

Leading Brands: Flyers Cocktail Co, Better than Booze, Minny Grown, Pamos, Trail Magic

Typical THC Dosages: 2.5mg, 5mg, 10mg

Core Demographic/Time for Consumption: Mocktails have the best appeal to the hardcore drinking crowd that loves their booze. As taste continues to improve, these will win over a lot of people tired of alcohol but still yearning for familiar flavors. The classic demographic for this is the middle-aged “wine mom”, but its definitely not the limit for this category.

My Take: Keep up the innovation! I am a big mixologist myself, and I have to say that Flyers’ Old Fashioned (I wish it wasn’t sparkling!) and Better than Booze’s Mint Mojito are two of the most impressive mocktail flavor profiles on the market. The big differentiator in this category is brands that take the time to craft a mocktail that actually tastes like its alcoholic counterpart, versus brands that are clearly buying an off-the-shelf mocktail flavor and slapping a label on a can. American consumers are among the most discerning in the world, and they notice the difference!

Dissolvable/Stick Pack

Leading Brands: Fizzy THC, Cann Roadies, Brelixi

Typical THC Dosages: Varied

Core Demographic/Time for Consumption: These are definitely geared towards the more adventurous/on-the-go consumer. I imagine people pairing these with events like hiking, camping, concerts, festivals, etc.

My Take: This is basically the equivalent THC product of nips/shooters in the alcohol space.  Convenient, portable, and an easy way to add a buzz to whatever activity you like to do on the weekends.

Shot

Leading Brands: Pot Shots, My Crew Doses, Botany Farms, Retro Bakery, 3CHI

Typical THC Dosages: 10mg, 20mg

Core Demographic/Time for Consumption: These are geared towards legacy/high-dose consumers looking for a quick high-dose buzz.  Many of these are marketed as “energy shots” that are supposed to give users a functional high meant for getting things done.

My Take: I haven’t tried any of these personally as they are beyond by comfortable, but I totally understand the appeal. See Uncle Arnie’s in the cannabis rec market for an example of how well these products can do. I have heard rumors of some of the rec market brands moving into the hemp market soon. High-dose users are typically more flower/vape-oriented, but in situations where they are on the go or don’t have a place to smoke, these make a great alternative.  

** I was curious to see if Uncle Arnie’s shot segment would ever enter the hemp market. I caught up with Uncle Arnies Co-Founder Theo Terris last week, who said that for the time being their high-dose shots will remain in the cannabis rec market, but they are moving forward with expanding their line of non-carbonated “nostalgic flavored” 10mg beverages in the hemp channel. Terris believes that in the long term, the hemp market will be the main avenue for low-dose beverages, while the cannabis rec market will remain the destination for all things high-dose. **

Innovation Opportunities

Spirit/Multiserve

Leading Brands: NOWADAYS, MXXN, Pamos, Artet

Typical THC Dosages: 2mg, 4mg, 6mg, or 10mg per pour

Core Demographic/Time for Consumption: These are for mixologists and the more sophisticated drinkers. To my knowledge, these are mainly being used for in-home consumption, and they can make a great addition to any dinner/cocktail party.

My Take: I am bullish on this subcategory and excited to see how it expands.  The recent surge in US alcoholic spirit sales shows the potential for this category. NOWADAYS is the clear leader in terms of brand awareness, but I’m sure other brands will join the races.  While these are dosed like an alcoholic spirit, the flavors of these are more like an aperitif/mixer. As food science advances, I am curious to see if it is possible to make a true non-alcoholic replica of tequila, vodka, whiskey, etc.  I tried one of the famous zero-proof tequilas on the non-alcoholic market and was sorely disappointed. This sub-category could revolutionize the on-premise cocktail experience once bartenders get comfortable using these products.

Beer

Leading Brands: Inde Local

Typical THC Dosages: TBD

Core Demographic/Time for Consumption: Men of all ages, especially those who are trying to cut back on beer consumption or have already switched to non-alcoholic beers.  Beer is one of the most beloved drinks in the country and is consumed at gatherings of all kinds throughout the year.

My Take: I cannot overstate how MASSIVE an opportunity I believe non-alcoholic THC-infused beer is.  Inde Local has made the first move as the only beer brand in the space (to my knowledge), but this category is basically open season at the moment. Yes I know, beer sales have been declining in the US, but it is still one of the most popular alcoholic drinks in the country.  Brands like Athletic Brewing Co have already proven that Americans can get excited about non-alcoholic beer.  Non-alcoholic beer typically has 50% less calories compared to alcoholic beer, so imagine pairing that with something that gets you buzzed without the hangover? The winners in this sub-category will win BIG.

Wine

Leading Brands: Discrete Vines, Five Flowers

Typical THC Dosages: TBD

Core Demographic/Time for Consumption: Wine moms and wine lovers. Wine finds its place during all seasons, and this could be the way that THC consumption breaks into the “upper class” of adult beverage consumption.

My Take: This is yet another area where food science has a bit of catching up to do, but I feel we are very close. I have had some great de-alcoholized sparkling white wines, and I’ve heard rumors of good reds but have yet to try them. Middle to upper-class adults love their wine, and similar to the opportunity of beer, if you can create something that has the same great taste but avoids the hangover, you may as well have struck gold. Five Flowers and Discrete Vines are the only brands I have seen in this space so far (Discrete Vines appears to be discontinued at the moment), and still, no one has attempted the bottle format. I am super excited for the day when I can crack open a bottle of THC-infused Merlot, and I hope someone is working on it!

Functional/Full-Spectrum

Leading Brands: BRĒZ, OFFFIELD, Shift Naturals, FIND WUNDER

Typical THC Dosages: 2.5mg, 5mg

Core Demographic/Time for Consumption: These products vary a bit with who they target. Some are for the active weekender/athlete, while others focus on the mindful consumer who is looking for some extra adaptogens or bonuses in the can besides THC.

My Take: This will be an interesting sub-category to watch. BRĒZ and OFFFIELD are definitely two standouts: 

• BRĒZ is a social-tonic that contains THC, CBD, and lion’s mane that is described as a “happy euphoria followed by a sense of relief and relaxation.” I tried one and they are excellent!

• OFFFIELD is “the world’s first high-performance drink” that is supposed to help you access a runner’s high, boost energy, and reduce inflammation. It contains THC, CBD, CBG, L-Theanine, Vitamins B6, B12, and C, Magnesium, and Zyn.

The use of major and minor cannabinoids, adaptogens, and supplements is fascinating, and I am curious to see if these continue to resonate with consumers, and if the science will back up the benefits of these additives.

Energy Drinks

Leading Brands: PACE, Thunder

Typical THC Dosages: 10mg

Core Demographic/Time for Consumption: I’m honestly not sure who will end up being the core consumers here (I don’t mean that in a negative way). My best guess is wherever the energy drink / functional stoner crowds overlap.

My Take: This is another category that will be fun to watch unfold. I don’t consume caffeine myself so I don’t have a lot of opinions on the energy drink market. However, if I know one thing it’s that Americans love their energy drinks. I’m sure energy drink powerhouses are already keeping tabs on this, as Monster Energy recently expanded into booze with a malt alcohol product.  It also brings me to another broader topic that I plan to discuss at a future date: 

• Will THC be treated like alcohol, or just another “food” ingredient? 

• Will the functional stoner be more fairly looked upon than the functional alcoholic, or are they one and the same?

• If drinks like Four Loko that contained both alcohol and caffeine were eventually banned, could THC energy drinks suffer the same fate? 

Honorable Mentions

Cold Brew

This category is still very early and could be an exciting one. Check out Gus Dean Coffee’s Cold Brew or clar!ty’s CoffePot if you are interested in trying a THC-infused cold brew.

Tea

Twisted Tea paved the way in the alcohol market, so I could see similar success in the hemp market. Similar to soda, this market has its work cut out for it as health-conscious consumers are continually looking for low-sugar beverage options. Check out BOLDT, Backyard, Hop The Wave, and Milonga if you are interested in these products.