In a surprising turn of events, the state of Minnesota has found itself at the forefront of a cannabis beverage revolution. It all began with a small, seemingly innocuous legal clause that has since led to an explosion in the market for hemp-derived THC-infused drinks. What started as an overlooked provision in a health care policy bill has transformed into a nearly $200 million industry, with over 4,000 licensed retailers in the state.
The Accidental Legalization of Hemp-Derived THC Beverages
Two years ago, Minnesota lawmakers voted to partially legalize cannabis, but many did so without realizing they were also permitting the sale of low-potency, hemp-derived beverages. This provision, tucked into a massive health care policy bill, allowed the sale of THC-infused drinks with little fanfare. The narrow scope seemed harmless, but the impact was far-reaching.
The market exploded in a way the country had never seen before. Practically every liquor store in Minnesota now dedicates shelf space to hemp-derived beverages. Struggling craft breweries seized the opportunity to create new product lines infused with cannabis, providing a much-needed financial boost during the pandemic.
Democratic state Rep. Zack Stephenson noted that many brewery owners have credited these products with saving their businesses. The timing was perfect, as the product became available exactly when business owners needed it most.
“I can’t tell you the number of brewery owners who have told me, ‘But for this product, we would have gone out of business,’” said Democratic state Rep. Zack Stephenson in a recent article by Politico about the boom over cannabis-infused beverages in Minnesota. “The timing was serendipitous. The product became available just at the time that it was needed.”
This fortunate turn of events has led to the widespread acceptance and popularity of cannabis drinks in Minnesota.
The state has seen significant revenue from the sale of hemp-derived THC beverages. A 10% gross receipts sales tax on these products took effect last summer, creating over $11.5 million in revenue from July 2022 to May 2023.
Cannabis Drinks Now on Tap at Minnesota Breweries
One of the most recent developments in Minnesota’s cannabis beverage market is the availability of THC-infused drinks on tap at local breweries which went into effect on July 1st, according to CBS News.
This progression signifies a significant shift in both the beverage and cannabis industries, allowing consumers to enjoy their favorite cannabis drinks in the social setting of a brewery.
The Unique Appeal of Cannabis-Infused Drinks
Cannabis advocates have long touted the benefits of cannabis drinks. Unlike alcohol, cannabis drinks don’t lead to beer bellies or hangovers, making them an attractive alternative for many consumers. This appeal has resonated particularly well in Minnesota, where the market has found widespread acceptance.
High-potency products aimed at consumers have traditionally dominated the legal cannabis market. This focus has deterred many potential users who want to try cannabis but worry about overindulging. Cannabis drinks, with their lower potency, offer a more approachable option for these consumers.
There is a significant segment of people who prefer a mild, relaxing experience without the intense effects of traditional cannabis products. This has contributed to the success of cannabis drinks in Minnesota.
“That hypothesis is now validated,” said David Gonzalez, head of growth at Hemp House, a South Minneapolis retailer that carries more than 200 cannabis beverage products. “There’s a very healthy segment of people who say, ‘I don’t need to be completely cross-eyed every single night. I just need something to take the edge off.’”
The Future of Hemp-Derived THC Beverages in Minnesota Once Adult Use Begins
Minnesota is in the process of establishing a comprehensive adult-use cannabis market, which will allow consumers aged 21 and over to purchase a wide variety of cannabis products. Sales are expected to start next year, raising questions about the potential impact on the hemp beverage market.
Given the significant interest in hemp-derived beverages in Minnesota, it’s likely that cannabis beverages will also gain popularity. However, these drinks will be available exclusively in licensed dispensaries, rather than in stores like Total Wine and More that currently stock hemp-derived drinks.
Minnesota’s accidental legalization of THC beverages has led to a remarkable industry boom, providing financial relief for struggling businesses and introducing a new category of cannabis products to a broad audience. With public health measures and legislative adjustments in place, the future looks promising for the state’s cannabis market.
As Minnesota continues to pave the way for cannabis drinks, other states are beginning to take notice. The success of this market demonstrates the potential for THC-infused drinks to reach new consumers and offer an alternative to traditional alcohol. If you’re curious about how cannabis drinks can fit into your lifestyle, there’s never been a better time to explore.
