In today’s Finshots, we tell you why THC beverages are on the rise in the US and whether they can displace the alcohol industry.

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The Story

Alcohol is America’s most widely used drug. But something else is quietly bubbling up to challenge that status: cannabis. Or as most people call it, marijuana.

It’s a plant whose leaves, flowers, stems and seeds are packed with compounds called cannabinoids. The two you’ll hear about most often are THC (delta-9 tetrahydrocannabinol), the one that gets you high, and CBD (cannabidiol), the one that doesn’t. These compounds interact with chemicals and receptors in your brain, easing pain, calming nausea and even helping with anxiety for some folks.

And now, for the first time in over four decades, consumption trends suggest that daily cannabis use in the US has overtaken daily alcohol consumption.

That’s got beverage makers curious enough to start experimenting with THC-infused beverages. Some contain just CBD, others lean heavily on THC, while some others have a mix. And the results look pretty impressive. In fact, a few retail markets say that these drinks now make up around 15% of their total sales.

And that got us wondering: Why are these drinks catching on so fast?

Well, for starters, younger Americans are starting to rethink their relationship with alcohol. Many are prioritising health and looking for something that won’t leave them groggy the next morning. THC drinks, especially the ones branded as social tonics, promise a mellow buzz, enough to loosen up at a party, but not enough to wreck your next day. Plus, a lot of them come in fruity, zero-calorie seltzer or carbonated water formats, which makes them even more appealing.

Then there’s the smoker-to-sipper crowd or people who’ve used marijuana for years but are now ditching the smoke to protect their lungs. For them, these beverages offer a rather cleaner, more discreet alternative.

So it’s no surprise that THC beverage sales are surging. A couple of years ago, the global THC seltzer market was worth about $340 million, and projections suggest it could hit nearly $2 billion by 2030.

But here’s where things start to get confusing.

Cannabis isn’t legal everywhere in the US. And yet, you can still find these drinks on liquor store shelves in states where recreational and even medical marijuana is banned. How’s that even possible, you ask?

To understand that, we need to rewind a bit.

For years, beverage makers flirted with the idea of THC-infused drinks. But marijuana, under federal law, is classified as a “Schedule I controlled substance” — the same category as heroin. That label makes things messy. Companies that work directly with marijuana can’t access federal tax incentives. And banks or investors don’t want to touch them with a barge pole, which makes both funding and expansion tricky.

So most brands kept their distance.

Then came the 2018 Farm Bill. It legalised hemp-derived products, including cannabinoids, as long as they contain no more than 0.3% THC by dry weight. That might sound like a small number, but it opened a massive loophole. It meant that beverage makers could now extract THC from hemp (instead of marijuana) and use it in drinks, even in states where cannabis isn’t otherwise legal.

This is how things changed. Unlike earlier, when THC beverages were only available at a handful of cannabis dispensaries, the bill made it possible for them to pop up on regular store shelves too. So you could say that this Bill was a game changer, while also being a huge factor in their rise.

And that begs the question: Can THC beverages actually displace alcohol?

At first glance, it might seem possible. After all, beer and wine sales have dipped by about 5% since 2023. At the same time, non-alcoholic and functional beverages, including THC drinks are on the rise. And that might make it seem like cannabis is eating into alcohol’s turf.

But it isn’t as simple as it sounds.

For one, there’s no federal limit on how much THC can be in a beverage. That 0.3% rule applies only to the raw hemp, not the final drink. This lets companies play around with formulas and serving sizes to legally pack in higher doses of THC.

Sure, states do set their own limits. Colorado , for instance, caps a single edible dose at 10 mg of THC, while others prefer 5 mg. But beverage makers are working around that too. Some cans of THC seltzer have 30 mg in them, while some fast-acting 60 ml shots carry a whopping 100 mg.

That makes these drinks federally compliant, but they still risk falling foul of state laws as regulators catch up. If a state suddenly clamps down on dosage limits, brands could find themselves in a tight spot overnight. And scaling a business in such a grey area could be risky.

Then there’s the “healthier” image that these drinks are riding on.

Yup, sipping a THC beverage might seem cleaner than smoking a joint or vaping. But that doesn’t automatically make it healthy. And the lack of public awareness around THC drinks only adds to the confusion. Some people might even mix them with alcohol. And that’s a bad idea. Combining THC and alcohol can amplify the effects and make things worse. Especially when eaten with food , THC tends to hit harder when consumed after a meal.

At the end of the day, THC is THC. Whether you smoke it or drink it, the health risks remain.

Cost is another hiccup. For context, a six-pack of THC seltzer can set you back $30 or more. That’s about six times the median cost of a regular six-pack of beer. For many people, that’s not a switch they’re ready to make, no matter how trendy it seems.

So yeah, the idea that THC beverages will completely overtake the alcohol industry might be far fetched as of now.

Interestingly though, some of the big alcohol companies aren’t ignoring this trend. They’re investing in or launching their own cannabis beverage lines. For example, Constellation Brands, the largest beer importer in the US and maker of Corona, invested $5 billion in Canopy Growth, a major cannabis company, to develop THC beverages.

That gives them a bit of a safety net. If laws shift in favour of THC, they’re already in the game. And if the loopholes close, they have the financial muscle to adapt. Smaller players don’t have that privilege.

So the future of THC drinks depends largely on how lawmakers respond.

Until then, the buzz around cannabis beverages might be real, but whether it’s strong enough to knock alcohol off its pedestal remains a high hurdle to clear.

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