It taps into an increasing willingness among retailers and manufacturers to experiment with beverages containing THC (tetrahydrocannabinol) and CBD (cannabidiol), amid growing consumer interest.
In April, an executive order issued by the Justice Department and the Drug Enforcement Administration (DEA) placed medical cannabis products and items containing cannabis and approved by the Food and Drug Administration (FDA) into schedule 3 of the Controlled Substances Act.
This means that cannabis will no longer be considered comparable to heroin and LSD in terms of its public health risk, instead sitting alongside ketamine and testosterone when it comes to federal enforcement.
Announcing the change, acting attorney general Todd Blanche emphasised the potential medical uses of cannabis-related products, highlighting “the longstanding regulation of medical marijuana by state governments”.
It’s a move that has unsurprisingly been lauded by the US cannabis industry.
“The biggest thing reclassification does is open the door for more streamlined regulatory oversight and provide the opportunity for more innovation,” says Craig Henderson, CEO at Extract Labs, a hemp-derived CBD manufacturer based in Colorado which sells oil, gummies and a THC seltzer.
“Now that a medical lens is being taken to cannabis, we are likely going to see clear regulatory guidelines that will finally set a precedent for product quality, and we will start to see more funding and opportunities for medical trials and other research initiatives that will really help us uncover the true benefits of this plant.”
Regulatory barriers
Greater federal regulations are seen by many in the industry as a means of reducing the legal barriers facing cannabis beverages.
The category – largely comprised of seltzers, wines and spirits containing THC and CBD – emerged in 2018 after manufacturers began exploiting a carveout in the US Farm Bill that allowed the sale of “hemp’ products containing less than 0.3% of Delta-9 THC, a cannabinoid that gives users a high.
Currently, much regulation is handled at the state level. When it comes to distribution, “cannabis rules still change dramatically from one state to another”, Henderson notes, adding that “navigating these challenges won’t change” as a result of reclassification.
Since the Farm Bill was enacted, state lawmakers have variously tried to restrict consumer products containing THC or even non-intoxicating compounds like CBD. Texas and Nebraska have both made moves to restrict hemp product sales, as has medical cannabis-friendly California.
Contrasting this, Minnesota has sought to legitimise cannabis products through regulation. In May, state legislators approved a bill which would allow retail sales of cannabis drinks in 750ml containers, and products containing specific ratios of THC and CBD, subject to the state governor’s sign-off.
The reclassification of cannabis doesn’t directly touch on hemp-derived beverages. But more involvement from federal authorities, particularly the FDA, “should help set some basic ground rules for cannabis production, and help destigmatise THC as a whole”, Henderson says.
Federal authorities are facing political pressure to loosen restrictions on the cannabis industry. While the carveout from the Farm Bill is currently scheduled to end in November due to legislation passed by Congress in 2025, the White House has indicated support for maintaining the exemption.
As reclassification was announced, President Donald Trump instructed Congress to “update the law to ensure that Americans can continue to access the full-spectrum CBD products they have come to rely on … while preserving Congress’s intent to restrict the sale of products that pose health risks”.
Retailer response
While Congress mulls its next move, select retailers are continuing to increase listings for cannabis beverages, which have been sold in liquor and convenience stores since the Farm Bill was enacted.
According to Ian Dominguez, chief investment officer at Delta Emerald Ventures, an investment group which specialises in cannabis, “THC drinks were already the fastest-growing product format in US cannabis before rescheduling happened.”
Target is the biggest retailer to have embraced cannabis beverages. Following reclassification, it announced listings in 300 stores across Florida, Texas and Illinois.
This followed a pilot programme in 10 Target stores in Minneapolis that began in October 2025, and will soon expand to 72 stores across Minnesota, following state regulatory approval granted in April.
Among the cannabis brands stocked in Target are Cann, Wynk and Trail Magic, according to BevNet (3). While the initial pilot featured products with 5mg of THC, Target has since started listing drinks featuring 10mg of THC. Sales are restricted to those aged 21 and over, as per state law.
“Major retailers like Target and Total Wine had begun stocking THC drinks while cannabis was still classified as a Schedule I narcotic, alongside heroin,” says Dominguez, noting that every retailer, distributor and manufacturer was willing to operate amid “the most restrictive federal classification possible”.
Beverage industry
Given the risk appetite shown by these companies, Dominguez is convinced that rescheduling will give the industry “permission to consider cannabis beverages like a normal consumer packaged goods category”, from R&D teams to retailers. “That unlocks formulation research into dosing and bioavailability, and it unlocks shelf space at the scale this category needs to reach mainstream consumers,” he says.
The opportunities should overturn existing reticence among more conventional firms.
“For years, many mainstream beverage companies have been interested in cannabis-adjacent products, but the regulatory uncertainty created hesitation around investment, formulation, distribution, and long-term brand building,” says Tony Vieira, chief executive officer at Mōcean Drinkwerx, and a veteran of the US brewing industry.
While start-ups have pioneered the category, the interest of larger drinks manufacturers will help improve it. “From an R&D standpoint, it opens the door for more sophisticated product development and broader collaboration across suppliers, ingredient companies, and beverage manufacturers,” Vieira says.
“Beverage companies are very good at building repeatable consumer experiences, and cannabis beverages still have room to improve in consistency, flavour masking, onset timing, and functionality.”
Alcohol replacement
This should be good news for brands that are pitching cannabis drinks as a replacement for alcohol, many touting their beverages as a “social tonic”. The expectation is that consumers will be drawn to the category as a source of an alternative buzz, or use it as a means of reducing their alcohol consumption.
Some brands are already leaning on the potential high derived from THC. Legally Highest, whose THC seltzers and iced teas are manufactured in Tennessee and is available in New Jersey, Florida, North Carolina and Tennessee, offers its drinks at higher strengths like 60mg and 30mg, as well as the lower dosage of 10mg.
Cannabis drinks’ potential as a party product tallies with the heightened interest shown in the category by younger generations. According to an NIQ survey conducted in autumn 2025, about a quarter of gen Z and millennial consumers in the US had consumed THC beverages in hospitality venues within the previous six months, compared to 9% of Gen Xers and 2% of boomers.
Wider interest is also up. Data across Google, TikTok and Instagram shows that searches for THC drinks grew 86.9% in the year to January 2025, according to market research firm Spate’s Popularity Index. Within this, the most popular brands included Nowadays, Ohho and Ayrloom.
Wellness occasions
Complementing the pitch to “sober curious” consumers, some in the industry are also hoping to push cannabis drinks into the wellness space, already gestured to by brands pitching the product as a drink that can give you a buzz without a hangover.
“As regulations stabilise, I think we’ll see more innovation around low-dose formulations, wellness positioning, and products designed for specific occasions rather than simply intoxication,” says Vieira.
He’s not alone in seeing the potential.
“Right now, much of the category still sits between two extremes: legacy cannabis culture and overly clinical wellness,” says Mark Christou, chief creative officer at CBX and co-founder of soda brand Culture POP.
“There’s significant white space for brands that can bridge modern wellness, social ritual, and premium beverage culture in a more accessible way.”
To his eye, the reclassification of cannabis will help the industry reframe THC from being a cannabis product to a functional ingredient that can be tied to “mood, relaxation, focus, wellness and social connection”.
“Social behaviour is evolving away from heavy late-night drinking culture and toward moderation, daytime occasions, wellness-led lifestyles, and more intentional forms of consumption. That creates a potentially powerful intersection for low-dose THC beverages, particularly brands positioned less around intoxication and more around experience, balance, and lifestyle,” he says.
He points to brands that are already focusing on mindfulness or wellness, including Cann, Magic Cactus and Recess. “They’ve shifted the conversation away from traditional cannabis culture and closer toward mood, ritual, balance, and functional beverage behaviour,” Christou says.
