Welcome Note

Welcome Back Gardeners to the 120th edition of Herbal Profiles!

Happy Friday yall!

We are now on day 9 of 2026, and yet somehow it feels like it’s already been a year.

This week we are back to our regularly scheduled programming. I have a fresh episode of the podcast linked below, featuring Emily Onkey, Co-Founder of Aplós. It’s a pretty awesome episode so be sure to check that out, and while you’re there be sure to subscribe if you haven’t yet, it’s free and really helps us out!

I have a bunch of great articles, studies, product relaunches, news, and more curated for you in the news roundup. In the featured story I dive into the leadership in times of chaos and where we are heading in 2026 as an industry. So be sure to read it all, and if you enjoy, send it to a friend, shoot me an email, and let’s chat!

I think I am going to try and also share at least one drink I sample each week for the rest of the year. Let’s kick it off with a new one I tried last night for the first time Revolution Apothecary!

And as always,

Let’s get into it.

-Lars

The subreddit I moderate with Chris Fontes has over 1,900 subscribers! And my other subreddit for the broader CPG industry is also growing, closing in on 700 subscribers. I would love to have you join us on either or both subreddits!

You can find us on Youtube, Apple, Spotify or wherever you get your podcasts!

The latest episode of the Free Spirits Podcast dropped on Monday. We have Emily Onkey from Aplós joining for Dry January! Be sure to check it out, and please subscribe and leave us a review. It is free and it really helps us grow. Thank you.

Any comments or questions? Leave comment on this post or shoot me an email. Would love to hear from you!

News Roundup

• Sprouts Mainstreams THC Drinks With 120-Store Launch

  Sprouts Farmers Market is now selling THC beverages in 120 stores, including a mix of hemp-derived brands. The move marks a significant moment of retail validation and could set precedent for broader grocery adoption. Read more →

• New Study Suggests THC Could Help Treat Cannabis Dependence

  A peer-reviewed study published in Substance Abuse Treatment, Prevention, and Policy found that oral THC (dronabinol) may reduce cannabis withdrawal symptoms and support long-term treatment outcomes. The research could help reshape how dependence is treated in clinical settings. Read more →

• DeWine’s Surprise Attack on THC Drinks Sparks Backlash

  Despite years of focusing regulation on gummies, Ohio Governor Mike DeWine abruptly targeted THC beverages in his latest veto. The move blindsided operators and raises questions about the state’s shifting stance on hemp-derived products. Read more →

• Jeng Secures Investment to Scale THC Beverage Business

  Jeng, known for its low-dose social tonics, has raised new capital to expand operations. The funding will support broader distribution and continued development of its hemp-derived beverage lineup. Read more →

• 8 Trends Set to Shape the 2026 C-Store Channel

  Convenience Store Dive highlights eight major retail trends, including functional beverages, alt-ingredient snacks, and THC products entering mainstream assortment. Expect increased friction between category growth and lagging policy. Read more →

• Ozempic and Cannabis: What Happens When You Use Both?

  As more consumers combine GLP-1 drugs like Ozempic with cannabis, experts are exploring the potential interactions. Early insights suggest appetite suppression may be amplified, with unclear implications for long-term wellness routines. Read more →

• Backyard Tea Relaunches With New Look and Same Craft Quality

  Founder Matt Dimmer announced the official relaunch of Backyard, a handcrafted THC tea brand made in small batches with loose-leaf ingredients. The brand differentiates by rejecting mass-production in favor of Midwest-made quality, calling itself “the best tasting tea in the category.”

  See the announcement →

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Full Steam Ahead: Why THC Beverage Leaders Are Betting Big Despite Regulatory Storm Clouds

It’s so crazy to me, in a good way, that as Congress prepares to potentially ban THC drinks in November, we have a new MAJOR retailer hopping into the fray. Sprouts Farmers Market is launching THC drinks across 120 stores in Texas and Florida. Meanwhile, some beer wholesalers are projecting 70% growth for 2026 while others quietly plan their "exit strategies."

Welcome to the THC beverage industry in 2026, where major retailers are doubling down on a category that federal lawmakers want to eliminate, and where industry leaders seem more energized by regulatory uncertainty than rattled by it. And I find it all so fascinating as it’s a look into the psychology of leadership in turbulent times. Do you exit or take the leap?

The Retail Confidence Vote

Sprouts' decision to become yet another national retail chain selling intoxicating hemp beverages represents a pretty major milestone a calculated bet on the category's future. The natural channel retailer will carry eight brands including Cann, Nowadays, Wynk, and Magic Cactus across dosages ranging from 2mg to 10mg THC.

"Occasion-based drinking is where the industry is headed," a Sprouts representative explained. "There is an occasion for alcoholic beverages, non-alcoholic beverages, and now hemp-derived THC. Differentiation is what makes Sprouts special and we will be trailblazing this category."

The scale is striking when compared to Target's cautious October test run in just 10 Twin Cities stores. Sprouts is launching statewide in two major markets, which is a major feather in the cap for confidence that extends far beyond a limited pilot program. Circle K's announcement that it would sell THC drinks in up to 3,000 stores this year adds another layer of retail validation.

The timing makes these moves even more remarkable. These retailers are expanding their THC beverage footprints just months before a potential federal ban takes effect in November 2026, barring new legislation to save the category.

Distributor Divide: The Numbers Tell Two Stories

The wholesale tier reveals the industry's split personality most clearly. On one side, a large Anheuser-Busch wholesaler, closed 2025 with nearly 18,000 case equivalents of hemp beverages and $1.6 million in gross sales. Their 2026 projection? $2.75 million, a roughly 70% increase.

"That is likely to increase as more chains jump onboard," the distributor noted, pointing to Sprouts and Total Wine as examples of expanding retail interest.

Across the country, a Molson Coors/Constellation wholesaler reported hemp-derived THC sales exceeding $5 million in 2025, roughly 0.9% of their total beverage sales. They're budgeting for 50% growth in 2026, expecting the category to reach 1.3% to 1.5% of total company beverage sales.

"For a category that we entered spring of 2024, it is much bigger than I ever imagined," the wholesaler said.

But not everyone shares this optimism. The same Molson Coors house acknowledged the regulatory reality: "Our hope is that this is addressed in Washington... if it isn't, I expect the market to start getting restricted this summer... and we will have to adjust and plan our exit from the space."

This divide reflects a fundamental question facing the industry: Is the current growth sustainable, or are distributors riding a wave that's about to crash against regulatory rocks?

Leadership Philosophy: "We Want This Fight"

At December's BevNET Live THC panel, category leaders made their position crystal clear, this industry is not just surviving regulatory uncertainty, they're embracing it as validation that they're building something worth fighting for.

"Alcohol consumption is in decline. We're handing you a parachute: here is the next 50 years of your business," Jake Bullock, CEO and Co-Founder of Cann, told the alcohol industry audience.

Justin Tidwell, CEO and Co-Founder of Nowadays, framed the turbulence as inevitable: "You start knowing you're disrupting something. That comes with highs and also a battle... We welcome this as a challenge to create a category that's long-lasting. It was bound to happen and we're ready to rise to the occasion."

Whitney Stevenson, President and Chief Commercial Officer of JuneShine Brands, was even more direct: "We're full steam ahead. We're going to continue to invest and move as fast as we can. We feel positive about what's to come and we're going to ramp up really hard."

Perhaps most tellingly, these leaders reject the narrative that THC beverages thrive only in regulatory gray zones. "We want regulation," Tidwell emphasized. "I want to build a generational company. For that to happen, we need to separate the good and bad parts of our industry."

The panelists agreed that THC beverages should ultimately be regulated like alcohol and flow through the three-tier system, viewing regulation as the path to legitimacy and national scale, not an obstacle to overcome.

The Long Game

The industry's confidence ultimately rests on a simple bet: consumer behavior will trump policy uncertainty. As Bullock reminded the BevNET audience, "People will always want alternatives. THC beverages are the best alternative because they deliver that social buzz."

Whether the bulls or bears prove right (I’m betting on the bulls personally) will define not just 2026, but the next decade plus of American drinking culture. The retailers and distributors betting big are wagering that the current regulatory chaos is temporary, but the consumer demand for alcohol alternatives is permanent.

If they're right, we're witnessing the birth of a category that will reshape the beverage industry. If they're wrong, a lot of very confident people are about to learn some expensive lessons about the power of federal regulation.

Either way, they're not backing down.

Enjoy this Newsletter? You’re in luck, I run a couple others. Check them out below!

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