The Challenging Pathways of Bringing THC Beverages to Market
Originally published on our craft beer newsletter Alcohol Content.
Written by: Joshua M. Bernstein
Photography courtesy of https://hybridtonic.com/
For breweries, both small and large, meeting the desires of fickle drinkers once meant adjusting alcohol’s form factor. Flavored malt beverages, fruited double IPAs, and hard seltzers are just different ethanol delivery mechanisms. However, as alcohol sales slump, breweries are embracing hemp-derived THC beverages to attract drinkers seeking a different buzz.
The federal government’s 2018 Farm Bill, which ended the ban on hemp cultivation, opened a legal door for breweries like Minnesota’s Modist, Fair State Brewing Cooperative, and Urban South in New Orleans to produce flavorful THC beverages. Last year, Industrial Arts Brewing in New York State’s Hudson Valley began exploring THC beverages after installing a tunnel pasteurizer for nonalcoholic beer and noting its distributor’s interest in carrying infused drinks legally sold in off-premise channels.
“The path to market seemed pretty easy,” says founder Jeff O’Neil. Industrial Arts developed the sparkling Hybrid Tonic, infused with 5 milligrams each of THC and CBD, and the same fragrant hops used in its popular IPAs. Blueberry Dream contains Mosaic, while Mango Haze has Citra, and Citrus Sunrise stars Simcoe. These are enticing ingredients for IPA fans and help Industrial Arts use excess contracted hops.
“We saw it as a way to make some lemonade out of the lemons in our cold box,” O’Neil says.
By the time the brewery introduced Hybrid Tonic in April, the regulatory framework in New York State had shifted, capping dosing at a minuscule 1 milligram of THC per serving, with a 15:1 ratio of CBD to THC. “So you’re basically in a CBD category, and that bubble already burst,” O’Neil says.
Industrial Arts pivoted its distribution into neighboring states like Massachusetts, Connecticut, and New Jersey, finding success before those states clamped down on the sale of hemp-derived THC beverages with varying rules. (Restrictions are a nationwide pattern. Last month, California banned all hemp products containing detectable amounts of THC.)
“It’s really hard to make a product that’s compliant in multiple states because there’s such a patchwork of regulations,” O’Neil says. “The path to market has gotten really challenging.”
Finding sales opportunities is a moving target. Industrial Arts now focuses on regions where hemp-THC beverages are still legal, such as the Southeast and Texas, and direct-to-consumer shipping. The brewery’s home market, however, remains dry, not high. “We’ve never been able to sell a drop of Hybrid Tonic in New York,” O’Neil says.