Welcome Note

Welcome Back Gardeners to the 103rd edition of Herbal Profiles!

I apologize, I missed last Friday. I thought I had it scheduled and before I realized it never went out it was Monday and I was in the throes of being sick. There will be a fresh episode of the Free Spirits Podcast dropping next Monday as well.

Something that I have long been a proponent of is taking beverage enhancers with me to concerts and bars when I go out with friends. Well, this past weekend was no different as I brought some Roadies and some Wims packets with me to DAER Dayclub to check out Two Friends (ps Daer is a cool concept but such a scam, but I digress). I bring this up, because as we all want to see these beverages continue to push into the mainstream, what happens to beverage enhancers if we reach a point of market saturation that beer or wine has in the on-premise channel? Surely there’s plenty of other use occasions, but it was something I was pondering as I was mixing my $7 lime juice & sodas in the 8oz cup that was 70% ice….

And don’t miss the latest episode of the Free Spirits Podcast. 

Let’s get into it.

-Lars

The subreddit I moderate with Chris Fontes hit 1,200 subscribers! Subscribe over on Reddit and follow along there!

The Free Spirits Podcast with David Gonzalez and myself just dropped episode 12 of season 2 with Kick Fizz Co-Founder, Julie Rhodes.

If you could take the time to drop a review of the podcast or even just share it with a friend or two, it really does help us grow and continue to bring you this show.

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News Roundup

• Rep. Morgan Griffith Releases Draft Hemp Bill - U.S. Representative Morgan Griffith has released a draft bill proposing a new regulatory framework for consumable hemp products. The bill would require age gating, clear labeling, and FDA involvement while preserving access to non-intoxicating cannabinoids. (Full Draft here)

• THC Drinks vs. Alcohol: Which Is Healthier? - CNET compares THC beverages with alcohol across categories like calorie content, hangovers, and long-term health impacts. Experts weigh in on potential benefits and risks, noting the lack of long-term cannabis consumption data.

• Cannabis group applauds compliance checks for hemp-based THC products - South Dakota cannabis industry advocates expressed support for state-led compliance checks targeting mislabeled or improperly sold THC hemp products. Officials say the effort aims to protect consumers and maintain industry credibility.

• More Young Adults Are Opting For Cannabis Drinks Over Alcohol At After-Work Happy Hours, Poll Shows - A new poll shows that young professionals are increasingly choosing cannabis beverages over alcohol at social gatherings. The survey suggests a generational shift toward lower-dose, functional social drinking options.

• John Kueber: These Changes Will Make Hemp Drinks Mainstream - CANN CEO John Kueber outlines key regulatory and retail factors that could push hemp-derived drinks into the mainstream. He points to consistency in state rules and increased access at major retailers as key drivers.

• THC Drinks for Travel: What to Know About Flying With Cannabis Beverages - Matador Network breaks down what travelers need to know about flying with THC drinks, including TSA guidelines and legality by destination. The article emphasizes checking both state laws and airline policies before flying.

• Alabama ABC Board Proposes New Rules Governing the Sale of Consumable Hemp Products - Alabama’s Alcoholic Beverage Control Board has released proposed rules that would regulate the sale of hemp-derived consumables, including beverages. The rules cover labeling, THC limits, and license requirements for retailers.

• Proposed hemp bill could impact cannabis drinks, delta-8 products - GreenState reports on federal legislation that could reshape the hemp beverage category by introducing THC thresholds and retail compliance standards. The bill aims to distinguish intoxicating from non-intoxicating hemp products.

• Snoop Dogg Expands Hemp-Infused Drinks “Do It Fluid” and “Doggy Spritz” to New Jersey, Georgia, and Tennessee - Snoop Dogg’s hemp beverage lines Do It Fluid and Doggy Spritz are expanding into New Jersey, Georgia, and Tennessee. The rollout adds to growing celebrity-backed brand activity in the THC drinks space.

• GOP Congressman Circulates Draft Bill To Regulate Hemp Products As Colleagues Pursue THC Ban - Rep. Griffith’s draft hemp regulation bill is gaining attention as some legislators push for a broader federal THC ban. The bill offers an alternative by proposing national standards rather than prohibitions.

• Cheech & Chong’s $100M Cannabis & Hemp Empire - Cheech & Chong have built a cannabis and hemp product portfolio valued at over $100 million. Their brand includes THC and CBD products, licensing deals, and a growing footprint in the infused beverage space.

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The Next Wave of Hemp Drinks

While regulators debate bans, hemp drink innovators have quietly moved past the seltzer phase. The next wave is going to be all about moments in time. Your morning coffee, that afternoon pick me up, or replacing your nightly cocktail.

The Seltzer Ceiling

Paulo Sobral saw it coming. The former Pepsi executive turned hemp beverage CEO watched as the market got "flooded with uninspired brands saying the same alcohol alternative messaging." By 2024, most hemp seltzers had become functionally identical: 3-5mg THC, fruit flavors, zero-calorie positioning, and the same tired pitch about replacing your evening beer.

"It's really simple to make a seltzer base and just add some powdered flavors and THC emulsion," Sobral, now CEO of Lolli Soda, explains. "That doesn't mean it's going to change the world or even get long-term consumer adoption."

It’s not that these products lacked quality but they were all identical and the novelty of drinking THC has worn off. These brands have largely been solving for one use occasion instead of a portfolio that can compete across the entire day. While brands fought over shelf space with nearly identical products, a handful of innovators began asking a different question: What if hemp drinks stopped trying to replace alcohol and started replacing everything else?

The Four Frontiers

Morning Ritual: THC Coffee & Tea

The coffee opportunity is hiding in plain sight. Americans spend $45 billion annually on coffee, with established morning routines that hemp beverages could seamlessly integrate into. But unlike the evening "alcohol alternative" positioning that dominates hemp seltzers, morning THC drinks require a completely different value proposition.

"You can literally put this ingredient into any form factor," says Ben Larson, CEO of cannabis ingredient company Vertosa. "You could reverse engineer the perfect product for any demographic."

The morning market represents hemp drinks' biggest white space opportunity, a daily use case that seltzers, with their evening positioning, never addressed.

Nostalgic Comfort: Craft Sodas

Sobral's Lolli Soda represents the clearest break from seltzer orthodoxy. Instead of fruit-flavored sparkling water, Lolli produces cherry cola, grape soda, and orange soda, what Sobral calls "legacy flavors" that consumers already love.

"We wanted something that looked and tasted like a premium craft soda first and that also just happened to get you high," he explains. "Cannabis is treated as an ingredient rather than the star."

The approach deliberately pushes against the wellness trend dominating hemp beverages. "We're just a fun soda," Sobral says. "People still like their indulgences. It shouldn't be something you're drinking all day every day."

This anti-wellness positioning might seem counterintuitive, but it opens hemp drinks to consumers who don't identify with the health-conscious messaging of most cannabis products. It's permission to enjoy something purely for pleasure, a surprisingly rare position in the hemp beverage market.

Social Sophistication: Spirits-Style & Cocktails

The most dramatic departure from seltzers is happening in the premium segment, where brands are creating 750ml bottles that look and feel like spirits. Nowadays, a brand Larson works with through Vertosa, "started in a 750ml bottle format... same ingredient, just diluted into a larger bottle."

Creating new merchandising opportunities that don't exist for 12oz cans. Retailers can place these products alongside spirits, wine, or in entirely new sections, depending on local regulations.

But what is really exciting, is what’s happening on-premise, where THC cocktails are being served alongside traditional spirits. Fable, a Colorado-based brand, is "dead set on creating the cocktail/wine replacement," according to Larson.

This on-premise channel represents hemp drinks' most important testing ground. "Bars are where consumer education happens and social acceptance gets built," explains one industry observer. Unlike retail shelves, bars provide professional service, controlled environments, and the social proof that comes from seeing others consume these products.

Functional Stacking

The biggest opportunity is happening at the ingredient level, where brands are combining THC with other functional compounds to create specific effects. This represents a fundamental evolution from the single-ingredient approach taken early on in the industry.

"We're seeing brands explore other cannabinoids, terpenes, or other active ingredients not derived from cannabis... L-theanine, ashwagandha," Larson explains. Sleep-focused products combine minor cannabinoids like CBN with micro-doses of THC and Chamomile. Energy-focused drinks pair THC with natural caffeine. Mood-focused products incorporate adaptogens.

This functional stacking allows brands to target specific occasions and consumer needs rather than offering a generic "relaxation" effect. A sleep drink works differently than a focus drink, which works differently than a social drink, even when they all contain THC as a base ingredient.

The approach mirrors the broader functional beverage trend, where consumers expect their drinks to deliver specific benefits. But unlike traditional functional beverages that rely on vitamins or herbal extracts, hemp drinks can deliver noticeable effects that consumers can actually feel.

Industry Expertise Migration

The hemp beverage category is benefiting from an influx of traditional beverage industry talent. Sobral brings Pepsi and Sierra Nevada brewing experience. The Float House team comes from beer industry backgrounds. This migration of expertise is bringing manufacturing sophistication and retail knowledge.

"Knowing how to talk to retailers, knowing what increases shelf velocity," is crucial, Sobral notes. These veterans understand the unit economics, trade mathematics, and operational realities that determine success in beverage retail.

Supply Chain Maturation

Manufacturing capacity has evolved dramatically. "It's night and day from when I was at Vertosa," Sobral explains. "There are a lot of craft brewers with line time... they believe in the category."

Established beverage manufacturers are now comfortable with hemp infusion, and the technical challenges around creating "stable emulsion in unique beverage matrix" have been solved. This means brands can focus on innovation and marketing rather than basic manufacturing problems.

The Category Grows Up

"You're going to see subsegments in the categories," Sobral predicts. "Just like with caffeine, you have coffee, energy drinks, and so on... You're going to see cannabis tea, cannabis coffee, cannabis sodas, cannabis seltzers, cannabis spirits."

This evolution represents the hemp beverage category's maturation from a novelty alcohol alternative into a legitimate beverage platform. The real competition is no longer with alcohol, it's with coffee, energy drinks, and functional beverages across every daypart.

Success will be measured not by how well hemp drinks replace alcohol, but by how seamlessly they integrate into consumers' existing beverage routines. The brands that understand this shift, from replacement to integration, will define the next phase of the hemp beverage revolution.

The seltzer phase taught the industry how to make hemp drinks. The next phase will teach it how to make them indispensable.

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