Minnesota Moves to Drink Their Weed and Taste the Future

by Diana Eberlein, Cannabis Beverage Association President, VP Marketing and Business Development, SōRSE Technology

What if I told you there was a place where you could get THC beverages at your local grocery store, at the same time you get your bananas for the week? Or that you could go to your favorite restaurant and have the bartender offer you a choice between wine, beer, hard alcohol, or a THC-infused drink? That this same place didn’t experience an increase in crime, car accidents, illness, or domestic abuse as a result, and that the worst thing that’s happened is perhaps some people have ordered a little *too* much dessert?

And what if I told you this place already exists…and it’s Minnesota?!

Why Minnesota - and Why Beverages

Author of this article and Cannabis Beverage Association President Diana Eberlein.

When the Farm Bill passed in 2018, hemp was declared federally legal when cultivated with a THC percentage of less than 0.3% by weight. Almost immediately, non-inebriating CBD products took off, proving consumer interest and developing a robust hemp industry nationwide. And in recent years, manufacturers across the country, particularly in states that have not yet legalized cannabis, have been experimenting, developing products infused with hemp-derived cannabinoids, including body-high inducing Delta-8 and psychoactive Delta-9 THC.

Made by either extracting directly from the plant or from CBD or CBG via a chemical conversion, hemp-derived Delta-8 and Delta-9 is technically legal across the country - but these are not products that can be sold in traditional retail or hospitality channels, due to a variety of legal and regulatory complications, including local health department oversight, risks for operators to lose their liquor licenses, and general legal ambiguity.

And then, came Minnesota, legalizing hemp-derived, THC-containing food and beverages in July of 2022. Suddenly, I’d heard rumors of bars serving THC-beverages, brewers getting into the hemp-derived game, and mainstream retailers embracing this new, legal loophole-fueled category. I’d heard of THC beverages sections next to the beer in liquor stores, and that some brands were even finding great success selling their products in places like salons and other non-traditional retail locations. I had heard this market being called the Wild West of cannabis, for all of these reasons and more. But after a few days in this unexpected marketplace, I discovered that what Minnesota has created, particularly for the beverage category, is not so wild at all. Instead, it is a taste of the future.

THC Beverages Hit the Ground Running

As I was checking into my hotel, a Marriott property in Minneapolis, I expected the standard, “What brings you to town?” conversation, but I was almost at a loss for words when my response (“To try your D-9 beverages!”) was met with two infused beverage options available for purchase right there at the bar. One D-9 beverage was even available in the lobby convenience market for purchase, alongside beer, wine and soda. A patron at the bar leaned over and chimed in, “That one’s really good, too!”

This was so shocking to me because I’m usually met with a million cannabis 101 questions about cannabis beverages when I explain what I do, or there’s my personal favorite standby response: “Cannabis beverages exist?” Providing resources to educate on and grow this category is at the heart of my work with the Cannabis Beverage Association (CBA), but in most parts of the country, and in Seattle, where I live, this level of consumer availability and awareness simply does not exist yet. I immediately saw that what Minnesota was doing was something that could change the trajectory of the whole category.

Not only that, I’d also heard that these beverages were having an impact on local businesses and the economy. With Delta-9 beverages on their menus, restaurants and lounges were seeing an increase in food orders, and because the infused beverages could be sold to-go in 4-packs, overall revenue was going up, an injection many businesses sorely needed coming out of the pandemic. All because of the addition of the hemp-derived THC options to the menu.

Within one hour of my arrival, I was already finding that THC beverages were not only here, but more accessible and accepted than I had expected. Little did I know, this was just the beginning.

The New Normal

A couple of hours later, my gracious host and cannabis beverage content creator colleague, Bri Smith, picked me up for dinner, where we were meeting the owners of Natreum, a CBD and hemp-derived THC retailer/lounge space that carries these hemp D9 beverages. But before we started talking shop, I spotted the tabletop beverage menu at the bar of Stanley’s Bar Room: It boldly read, “THC SELTZERS,” with four options at various dosages listed right above the wine selection.

Seeing this sign in a restaurant hit me hard. I could hear myself saying slowly in my head: “THC beverages. At a restaurant. That has a liquor license. And they are comfortable selling and openly promoting THC beverages!” There is nowhere else in the country where THC-infused products are sold in the bar/restaurant environment, and across the country, restaurants and bars would be at risk of losing their liquor licenses if they did. My. Mind. Was. Blown.

Of course, I ordered one, and while I was beaming with excitement, Instagramming this experience, everyone around me was just going about their business. This is their normal, I realized. And that is what I wasn’t prepared for: the normalcy of THC beverages being available everywhere.

As we sipped our infused beverages, I learned that Natreum currently has the most infused beverages of any retail store, with nearly 70 different offerings. I nearly spit out the drink I’d been so excited to order! “Seventy!”I thought, “That must be a mistake.” But then they mentioned that another retail location had 50. In Seattle, where I’m from, we’re lucky if we have 10 SKUs from three or four producers.

As President of the Cannabis Beverage Association, I’m constantly being reminded that the legal cannabis beverage space is only 1-3% on average of the current market share. Our challenges in the regulated market are ample across the supply chain, making these products difficult to manufacture, distribute, and retail in the traditional dispensary environment. I couldn’t believe the brand and product diversity Minnesota had promised, but the next day I would see it all myself.

Bars and restaurants in Minnesota are able to sell alcohol, food, and cannabis-infused food and beverages. *Photo: Diana Eberlein*

420 Every Day

The next day, I joined Natreum at their lounge for a 420 party where we were celebrating the fact that Minnesota was making the beverage category look (and taste!) so damn good! I was excited to speak with the “boots on the ground'' responsible for growing the Minnesota market, and I was amazed to learn that Natreum did in fact have 70 SKUs available for purchase to-go or to be consumed onsite at their onsite Flower Bar, which was lined with refrigerators.

I visited with another THC retailer, Dabbler Depot, which is a traditional beer, wine and liquor store that offers things like high-end nonalcoholic quaffs, an extensive selection of local ciders, and a wide array of craft wines and spirits. And they’ve also launched an extensive THC beverage marketplace, where they sell products like Chronic Tonic and Discrete Vines Moscato, made from dealcoholized wine from the Yakima Valley in Washington.

At Dabbler Depot, guests were able to enjoy live onsite sampling, and brands could offer product and swag giveaways. I didn’t have to stop at the ATM, and I could pay for things with a credit card. These are little details, but they felt like treasured luxuries compared with how brands and retailers must operate in the regulated cannabis market, where sampling is difficult and credit card processing is a pipe dream.

At 420 party after 420 party, and at every stop I made along the way, I was met with the same experience: Alcohol and THC beverages simply coexisting. From bars and breweries to the corner store, THC beverages had become an expected, normal offering that enhances an overall menu, not detracts from it. There was no increase in crime or public safety issues when THC was sold and managed just like alcohol at retail and in restaurants. It had become strikingly clear to me: When it comes to infused beverages, our 420 celebration is just Minnesota’s everyday.

Bring on the Brewers

Another unforeseen benefit to the “unregulated market” in Minnesota was that the brewers were able to not only produce their own THC beverages, but also offer co-manufacturing and co-packing services to other brands. This might not seem like a big deal, but anyone working in the regulated cannabis beverage industry can tell you that there is a manufacturing bottleneck due to the limited number of licensed co-packers available in many markets. Bottling and canning lines are expensive, and there are a limited number licensed co-packers equipped to produce beverages well, resulting in extremely high manufacturing costs, which presents a real hurdle to new brands looking to launch in the market.

But the Minnesota brewers not only have the manufacturing infrastructure to support launching new brands and SKUs, they have experience working in a regulated market–and they have more to lose when they are working with hemp D-9. A mistake could lead to their other licenses being suspended or revoked, so you know they are going to ensure they do it right. They make beverages day-in and day-out; they know all about can liners and how to work with various ingredients, flavors, terpenes and emulsions. This depth of experience allows these hemp D-9 drinks to hit shelves quickly–and scale. And that’s how you get 70+ SKUs in market in just seven months time.

I had been in Minnesota for just over 24 hours, and as I laid in bed that night, I thought, “It’s going to be hard to go back to a regulated market after this.” I’d found myself in a cannabis beverages dream–and I didn’t want to wake up from it.

What The Future Holds

As a cannabis beverage enthusiast and a representative of the Cannabis Beverage Association, I can tell you that the lifestyle Minnesota has created for cannabis beverages is what we’ve envisioned for the future. It’s a case study, social and economic, that can set an example for other markets, the country, and the world.

That said, regulation in Minnesota is inevitable and necessary from a consumer safety standpoint. And with the state imminently on-track to legalize marijuana, changes may come, and it will be interesting to watch it unfold. But regulation is only bad when it’s done poorly, and the trick is “screwing it up the least,” as best put by Bob Galligan, Director of Government and Industry Relations at Minnesota Craft Brewers Guild, who is working with brewers, manufacturers, and regulators to hopefully achieve just that. Collaboration and compromise will be key. No matter how it shakes out, it likely won’t be perfect right out of the gate, but it is essential that future regulations don’t attempt to “put the toothpaste back in the tube.” It will be important to strike a solution that supports the beneficial environment already created for these businesses and won’t stifle future growth.

The cannabis beverage market is small but mighty, and as a result, we collaborate and work together because rising tides lift all ships. And Minnesota’s beverage market is a rising tide, demonstrating just how mighty the category can be. If Minnesota succeeds and influences other markets and regulations, cannabis infused beverages have the potential to grow exponentially due to its power of human connection.

Back home in Seattle, I was quickly reminded that I wasn’t in Minnesota anymore when my friends and I planned a dinner out where. I realized I wouldn’t be able to order a THC beverage with my meal, and I couldn’t help but feel sad. Don’t get me wrong, I love my wine! But that week in Minnesota had been the first work trip I’d taken when I didn’t consume a single alcoholic beverage, simply because I had the option to consume THC beverages everywhere I went. I’d experienced no hangover or foggy mornings, went to all the meetings and social outings, and came back from a work trip actually refreshed. It was the kind of thing I could get used to. I think it’s the kind of thing we could all get used to. Cheers to that future, paved the way by Minnesota.

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