Report Examines the Emerging THC Beverage Industry from a Policy and Regulatory Perspective, Addressing Demand by State, and Providing an Estimate of Current and Future Legal Sales

Whitney Economics (WE), a global leader in cannabis and hemp business consulting, data, and economic research, today announced it has issued a comprehensive cannabis and hemp beverage report that examines the emerging THC beverage industry from a policy perspective, and addresses demand and estimates legal sales by state.

“A confluence of factors, including shifting consumer behavior, economic softening and federal regulatory changes, combined to open the doors to a rapid expansion of THC beverages across the United States,” WE Chief Economist Beau Whitney said. “The emergence of THC beverage products has provided a solution that helps backfill declining revenues across multiple industries, including beer, wine and distilled spirits.”

An advance summary of the report indicates:

• The total potential market is valued, conservatively, at between $9.9 billion and $14.9 billion
• Legal sales in the U.S. were $1.0 billion and $1.3 billion, meaning that there is still huge upside potential in this market
• There are roughly 500 – 750 brands in this space nationally, roughly 200 of which were selling via marijuana dispensaries
• Most brands average $2.0 million per year while top brands can easily exceed $10 million or more in annual sales
• At the time of the report, THC beverages are legal in 28 states, legal but restricted in another nine, can only be sold in marijuana stores in seven and completely illegal in six states
• With the lack of a federal regulatory framework, state regulators are struggling with how to establish effective policies that protect consumers while allowing for the growth and expansion of the market
• THC beverage production involved an extended supply chain and testing at multiple stages of production. Much more so than traditional marijuana testing
• THC beverage growth will be sustained over the next decade, but the near terms forecast will be influenced by policy changes at both the state and federal levels

“The cannabis beverage market is gaining serious traction, but we’re still in the early innings. With consumer demand rising and alcohol moderation trends accelerating, THC beverages are helping shape a new kind of drinking culture — one rooted in control, wellness, and enjoyment,” Art Massolo, Vice President of Business Development, Cycling Frog (one of the report’s sponsors) said. “This report shines an important light on where the market is headed next.”

Beverages containing THC were considered a niche market when they were initially sold through state regulated cannabis dispensaries. Accounting for roughly 1% of total U.S. regulated cannabis sales, the THC beverage industry was not taken seriously until changes in federal law, via the 2018 Farm Bill, allowed for the proliferation of THC beverages across the U.S. The federal decoupling of hemp from marijuana enabled ingredients derived from hemp processing to be productized and sold directly to consumers with significantly less regulation and oversight.

As a result, the THC beverage industry experienced rapid expansion through multiple channels, including traditional marijuana retail dispensaries, direct to business sales, traditional alcohol distributors, and even online via direct-to-consumer sales. This led to significant sales growth that have exceeded $1 billion in 2024 and is forecasted to expand exponentially in the near and medium terms.

For more information on this report, visit whitneyeconomics.com.

About Whitney Economics

Portland, Oregon-based Whitney Economics is a global leader in cannabis and hemp business consulting, data, and economic research, supporting hemp and cannabis operators, investors and regulators. Whitney Economics does not take a position on the legalization of cannabis, nor does it take positions on proposed legislation. Visit whitneyeconomics.com.

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“The emergence of THC beverage products has provided a solution that helps backfill declining revenues across multiple industries, including beer, wine and distilled spirits.” – Beau Whitney, Chief Economist, Whitney Economics.