Whitney Economics Issues U.S. Cannabis and Hemp Beverage Report

*PORTLAND, Ore. —* Whitney Economics (WE), a global leader in cannabis and
hemp business consulting, data, and economic research, 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

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.
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.