Craft beer brewers ponder THC drinks: Friend or foe?

Atlanta-based New Realm Brewing Co. has always been quick to adapt to the shifting tastes of its customers. In 2021, the just four-year-old company opened a distillery and released a series of ready-to-drink canned cocktails. The brewery debuted AlphaWater to cater to the hard seltzer craze that same year. They followed that with a nonalcoholic IPA in 2023. But in February 2025, New Realm introduced a beverage line that had posed a dilemma even for them: Higher Realm and Liquid Weed THC-infused seltzers.

Thanks to a regulatory loophole created by Congress seven years ago, hemp-derived THC beverages are now being sold legally in liquor stores and online across the country — and yes, they’ll get you high. This new, psychoactive drinks category is competing with craft beer for precious (and shrinking) shelf space and putting small brewers to a tough decision: should they partake?

“We thought long and hard about whether this was appropriate for us and our business,” says New Realm brewmaster and co-founder Mitch Steele. Branching out beyond beer and malt liquor would require navigating new regulatory and legal questions, compounded by having taprooms in multiple states.

Annual declines in beer sales and the changing drinking habits of younger consumers seeking healthier products ultimately tipped the scales. THC drinks are often lower in calories and sugar than alcoholic ones and generally don’t produce hangovers, which plays to today’s wellness trends. “We’re a brewing company, primarily, but we wanted to provide an alternative to guests that aren’t alcohol drinkers,” says Steele.

Liquid Weed and Higher Realm are each available with 2 milligram and 5mg doses of THC in both Blueberry and Orange Crush flavors. By comparison, an average American joint results in about 12mg of THC being inhaled. Steele says the $18 four-packs of 12-oz. cans of both are selling steadily out of five New Realm taprooms, despite prices that are slightly higher than those of regular beers (between $11 and $14).

Legal loophole

The boom in THC drinks dates to the 2018 Federal Farm Bill, which was mostly meant to cover farming and food aid but also quietly legalized hemp, defined as cannabis with less than 0.3% Delta-9 THC by dry weight — a distinction whose wording created an unexpected loophole. That threshold allowed companies to extract and concentrate THC from hemp in ways that still comply with the letter of the federal law even if the final product is intoxicating.

As of mid-May, 24 states explicitly allow certain hemp THC beverages, as long as they’re not synthesized, 10 have strict potency caps, and 11 have banned them altogether.

Closing the loophole is one of the most controversial parts of the next Farm Bill (it was supposed to be renewed every five years), which has been delayed amid broader political fights. The 2018 bill expires on Sept. 30, and any change to hemp’s legal status will require new legislation to reverse it.

Sales of hemp-derived THC drinks already outpace those of marijuana-derived ones, according to Bloomberg Intelligence analyst Kenneth Shea. If left alone by regulators, the category could reach $5 billion by 2028, a tenfold jump from 2024.

Strictly regulated cannabis drinks derived from marijuana plants have been around for a while, but they never took off. “People didn’t go to dispensaries to buy a drink — they went to get bud or vapes,” says Shea. But now that hemp-based drinks are federally legal, you can find them in regular shops, often right next to beer. And that shift is happening faster than regulators can keep up.

“I don’t think the Farm Bill is coming any time soon, at least a year or two away,” Shea says. “By then, this’ll be a multibillion-dollar business. You can’t put the genie back in the bottle.”

Greater competition

In a sense, legal cannabis has always been a competing intoxicant for brewers, distillers and winemakers. But unlike edibles or joints, which feel separate from the world of booze, these THC drinks, like beer, come in a can. And a precedent-setting string of Minnesota laws have led to them being sold in the same places as beer.

“Even if THC’s not a competitor for the same occasions, it’s a competitor for physical space,” says Bart Watson, president and CEO of the Brewers Association, the trade association for small and independent brewers that hasn’t taken a stance on the issue. “Some brewers are philosophically opposed to it, but even some of those who are making them consider it a threat, which is why they’re doing it.”

Jim Koch, founder of Boston Beer Co., the country’s second-largest craft brewer, noted as much on a Feb. 25 fourth-quarter earnings call, without going as far to commit to a resolution. “It’s too early to see an impact on beer consumption, but it’s a much bigger threat than weed was. You’ve got it in Total Wine, you’ve got it in liquor stores,” he says. “It’s there next to beer, and that’s the first time that’s happened.”

By 2027 beer sales are expected to fall to 36% of the U.S. alcoholic beverage market, from 45% in 2017, according to Bloomberg Intelligence.

Cannabis company interest

Legal cannabis companies are also entering the fray. In February, Trulieve Cannabis Corp. introduced a hemp-derived THC drink called Onward, now sold online and shipped to states where it’s legal, as well as in retail liquor stores such as Total Wine and ABC Fine Wine & Spirits. A second product, Upward — a CBD and THC plus caffeine energy drink — is set to launch this June. Upward will be be priced in retail at $19 to $21 per 4-pack, depending on the strength, and come in four flavors: 5mg THC lemonade, peach nectarine and strawberry tea and a 10mg pink lemonade.

“We’re doing a lot of conversation around folks who haven’t tried cannabis before, who are the canna-curious or maybe they’ve tried here and there and are interested” in replacing or augmenting alcohol consumption with a cannabis product, said Trulieve CEO Kim Rivers on the company’s May earnings call.

Other U.S. and Canadian cannabis producers that sell hemp-based THC beverages in the U.S. include Tilray Brands, Organigram and Curaleaf Holdings, which opened a hemp-only store in West Palm Beach, Florida, in April. Called the Hemp Company, it sells four-packs of 2.5mg or 5mg Select-branded Zero Proof seltzers for $21.99 and FormulaX energy drinks in 10mg flavors such as Glacial Melt and Rocket Pop for $24.99.

Moral qualms

Meanwhile, brewers face the peer pressure (and business decision) of whether to get in on the party or remain outside the circle. The dilemma is not so much a question of capital investment — for anyone who already has brewing equipment and packaging, transitioning to THC is relatively easy once the regulatory side has been navigated — but rather a philosophical and ethical one. Some purveyors of intoxicating beverages still view weed as a drug.

“I’ve talked to people who are against it ideologically,” says Alec Travis, who sits on the board of the Iowa Brewers Guild and is co-owner and beverage director at Field Day Brewery. “They say, ‘The business man in me tells me I’m an idiot, it’s taking off.’ But it’s just their personal feeling with cannabis. They don’t believe in it.”

Travis and his partners have no such qualms. In 2024, Field Day launched Day Dreamer Cannabis Sparkling Water as a separate brand. With four-packs priced from $14.99 to $24.99, depending on THC levels, sales have been “steady” thus far, according to Travis. The brands are sold throughout Iowa in 100-plus Fareway Grocery stores. Day Dreamer is working on new flavors to to add to their popular 2mg THC flavors Lemon Ginger and Strawberry Citrusand the award-winning 4mg Blueberry Lavender (Nightcap).

“We saw this as a way to reach new markets but also to bring them into our space and educate them about our beer,” says Travis. He, like many other brewers across the country who’ve branched into THC, just hopes the government doesn’t suddenly decide to kill the buzz.

“We’re preparing for more regulation, less regulation — or for it to go away completely,” he says. “We’re on the edge of our seat not knowing.”