THC Beverages: A Look at the Rapidly Growing Market

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A recent report from Whitney Economics, a company that specializes in cannabis and hemp business economic research, consulting, and data, investigated the growing tetrahydrocannabinol (THC) beverage industry involving both cannabis and hemp (1). Inside the report, it looked through data that explored the demand of the THC beverage industry, legal sales by state estimates, and how the market is growing.

“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 (1). “The emergence of THC beverage products has provided a solution that helps backfill declining revenues across multiple industries, including beer, wine and distilled spirits.”

Key findings in the report, as mentioned in the press release, include (1):

• 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 explained (1). “This report shines an important light on where the market is headed next.”

Prior to the 2018 Farm Bill, THC beverages were sold to be purchased by consumers at cannabis dispensaries that were regulated by the state (1). The press release mentioned that 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,” (1). Beverages containing THC were now allowed to be purchased through a variety of revenues such as, traditional alcohol distributors, retail cannabis dispensaries, direct to business sales, and online direct to consumer sales (1). In 2024, the THC cannabis and hemp beverage industry reported more than $1 billion in sales and is anticipated to grow as the industry continues to develop.

In 2022, Whitney Economics conducted a survey and found that more than 70% of businesses discussed that the “lack of access to banking or investment capital” is their top challenge,” (2). Hopefully, with calls for congress to implement cannabis banking reform measures, such as the SAFER Banking Act, changes can be made to the cannabis industry that will help businesses thrive.

References

1. Whitney economics issues U.S. Cannabis and hemp beverage report: THC Beverage Sales top $1.1B https://whitneyeconomics.com/press-detail/whitney-economics-issues-u.s.-cannabis-and-hemp-beverage-report-thc-beverage-sales-top-$1.1b (accessed Sep 3, 2025).
2. Colli, M. Calls for Congress to implement cannabis banking reforms grow https://www.cannabissciencetech.com/view/calls-for-congress-to-implement-cannabis-banking-reforms-grow (accessed Sep 3, 2025).