The Wild World of Hemp-Derived THC Beverages
A chat with Jake Bullock (Cann) and Diana Eberlein (Vertosa)
State of the Market
Hemp-derived THC beverages are surging in the US despite a complicated and contradictory regulatory environment.
Sales of the white-hot segment hit $382m in 2024 (+275% vs. 2023) and are projected to 10x to $4.1b (US) in the next four years.
All at a time of immense uncertainty as questions loom over how state and federal lawmakers will move forward.
Texas just passed SB3, essentially banning THC beverages from the state. That bill is now sitting on Gov. Abbott’s desk for signature.
On the federal level, the Farm Bill is up for renewal later this year. It’s anybody’s guess which way that’ll go.
“This category is growing faster than the laws can keep up, but the direction is clear. Consumers want this, and the market is responding.” - Jake
The Loophole —> 2018 Farm Bill
The 2018 Farm Bill unintentionally created a loophole by legalizing hemp with less than 0.3% Delta-9 THC, opening the door for intoxicating compounds to be extracted and sold in consumer products.
The original intent was to legalize industrial hemp for agricultural and commercial use, mainly for fiber and grain. Lawmakers didn’t anticipate that manufacturers would extract intoxicating THC compounds from hemp.
But the proverbial cat is out of the bag…
THC drinks have exploded over the past few years by way of partnerships with major retailers and distributors across the US.
Often marketed as alternatives to alcohol, traction is building with consumers looking for a different kind of buzz:
“It’s replacing two glasses of wine on a Tuesday. That’s the moment we’re winning. Those quiet, end-of-day rituals where people want to feel good but stay sharp.” - Diana
Texas Tribune article, May 25 2025.
Federal vs. State Regulations
The next Farm Bill isn’t expected to pass until late 2025 / 2026, leaving states to navigate the regulatory landscape independently.
This has resulted in a patchwork of laws governing hemp-derived THC beverages, with the majority of states establishing regulatory frameworks and others going the route of bans.
"Sixteen states considered bans on hemp-derived THC products this year, and fifteen of those efforts failed. Texas is the outlier." - Jake
Well, Texas and California.
California enacted an emergency ban in September 2024, citing concerns over sales to minors. The ban prohibits any detectable amount of THC in hemp-derived food, beverages, and dietary supplements.
The results have been mixed with challenges enforcing these rules in unlicensed venues and online marketplaces.
“In California, 70% of the market went illicit after the ban. The legal products disappeared, but the high-potency synthetics stayed on shelves in head shops and smoke shops. There’s no tax base left to fund enforcement, and the illicit market thrives.” - Diana
Texas is now on a path to follow suit.
Meanwhile, hemp industry advocates are pushing for clear standards in place of bans.
A Framework for Sensible Regulation
"We're not fighting regulation. We're asking for it. Tax us. Test us. Treat us like alcohol." - Jake.
The most widely endorsed framework for regulation includes the following guardrails:
(1) Dosage
Enforce limits per serving (10mg) and per package (100mg).
(2) Third-Party Testing
Lab testing for THC content as well as pesticides, heavy metals, and synthetic byproducts.
(3) Labeling
Clear communication of THC content as well as usage warnings and QR codes linking to lab results.
(4) Age Gating
21+ ID checks at all points of sale to enforce adults-only access.
(5) Distribution
Modeled after alcohol, a license-based retail system that’d give states control over where and how THC beverages are sold, helping ensure products reach consumers through vetted, compliant channels.
