THC Beverages: Market Shifts, Key Players, and Future Signals

The beverage industry is undergoing a significant transformation, driven by the rapid rise of THC-infused beverages. As consumer preferences shift away from traditional alcohol consumption towards wellness-oriented alternatives, this nascent market segment is carving out a substantial economic footprint. Currently, the market is navigating a complex evolutionary phase marked by regulatory fragmentation, rapid innovation, and a strategic recalibration from early-stage euphoria to long-term value creation.

Recent market activity indicates a notable upswing in consumer adoption and strategic investment. The global cannabis-infused beverage market was valued at $915.0 million in 2021 and is projected to surge to $19.1 billion by 2028. This growth is underpinned by an influx of capital and a series of strategic deals aimed at securing market share. Continue reading to understand the key trends, major players, and future implications of the THC-infused beverage market's social and economic impact.

The State of THC-Infused Beverages in 2024

The market for THC-infused beverages is experiencing exponential growth, moving from a niche category to a mainstream contender. Market data illustrates a clear upward trajectory; sales in the U.S. and Canada reached an estimated $1.1 billion in 2023, a significant increase from previous years. Projections from BDSA indicate that this segment will continue to expand, with an expected compound annual growth rate (CAGR) of 26.9% between 2022 and 2028. This growth outpaces many other cannabis product categories, signaling a fundamental shift in consumption habits.

While early market activity was characterized by high-volume, speculative investments, the current landscape reflects a more mature, strategic focus. Companies are no longer just competing on product availability but are differentiating through brand identity, formulation technology, and distribution scale. This has led to a pivot from large-scale, headline-grabbing acquisitions to smaller, more accretive deals focused on building robust, vertically integrated operations. The emphasis has shifted from pure market penetration to establishing sustainable profitability and brand loyalty in a competitive environment.

Primary Drivers and Objectives of THC-Infused Beverage Activity

The rapid expansion and strategic maneuvering within the THC-infused beverage sector are propelled by several key business objectives. These drivers are critical for companies aiming to establish a defensible market position and achieve long-term growth.

1. Vertical Integration and Supply Chain Control: Securing a consistent and cost-effective supply chain is paramount. Companies are actively pursuing vertical integration to control production from cultivation to final product. This strategy not only reduces reliance on third-party suppliers but also ensures quality control and enables greater economies of scale. By managing the entire value chain, operators can better navigate regulatory complexities and protect their margins.

2. Brand Building and Market Differentiation: In an increasingly crowded market, establishing a strong brand identity is a primary objective. The goal is to move beyond the novelty of THC and build brands that resonate with specific consumer segments, similar to the craft beer or premium spirits markets. This involves significant investment in marketing, product development, and creating a unique consumer experience that fosters loyalty and justifies premium pricing.

3. Distribution and Market Access: Gaining access to dispensary networks and, where legally permissible, mainstream retail channels is a critical driver of activity. Strategic partnerships, acquisitions of distributors, and investments in logistics are essential for scaling operations. Companies with established distribution footprints have a significant competitive advantage, allowing them to reach a broader consumer base more efficiently than smaller competitors.

Analysis of Key THC-Infused Beverage Transactions

Several recent deals highlight the strategic priorities shaping the THC-infused beverage landscape.

• Canopy Growth Acquires Wana Brands (2021): Canopy Growth’s deal to acquire Wana Brands, a leading edibles company in North America, for $297.5 million in cash plus future payments, was a landmark transaction. This move provided Canopy with immediate access to Wana’s established brand recognition and extensive distribution network, signifying a major push into the lucrative U.S. edibles and beverage market upon federal permissibility.

• Tilray Acquires Truss Beverage Co. (2023): Tilray Brands announced its acquisition of the remaining 57.5% stake in Truss Beverage Co. from Molson Coors Canada. Having already owned 42.5%, this deal consolidated Tilray's control over a leading cannabis beverage producer in Canada. The transaction solidifies Tilray’s market-leading position and demonstrates a commitment to owning the beverage category as a core part of its cannabis portfolio.

• Green Thumb Industries (GTI) Launches Cann (2022): Rather than an acquisition, GTI’s partnership to produce and distribute Cann, a popular low-dose THC beverage, in Illinois and soon other states, is a significant strategic alliance. This deal leverages GTI’s manufacturing and distribution infrastructure to help Cann scale rapidly, demonstrating a model of collaboration between established MSOs and popular independent brands.

• Pabst Labs' Entry (Ongoing): The launch of Pabst Blue Ribbon Cannabis-Infused Seltzer represents a pivotal moment where a legacy alcohol brand entered the THC space. While not a traditional M&A deal, Pabst Labs licensed the iconic name to create a new product line, signaling a broader trend of cross-industry brand leveraging to attract mainstream consumers.

Conversely, some ventures have stumbled. The initial joint venture between Constellation Brands and Canopy Growth, while groundbreaking, faced significant operational challenges and write-downs, highlighting the difficulties of integrating traditional beverage operations with the volatile cannabis market. This serves as a cautionary tale about the complexities of such cross-sector collaborations.

What These Deals Signal for the Future Beverage Landscape

The recent wave of transactions and strategic partnerships offers clear signals about the future direction of the beverage industry.

1. Market Rationalization and Consolidation: The market is moving toward consolidation. Smaller, less-capitalized players will likely be acquired by larger, multi-state operators (MSOs) or established consumer packaged goods (CPG) companies seeking entry into the space. This will lead to a more rationalized market dominated by a few key players with scale.

2. Shift From Euphoria to Strategy: Early investments were often driven by hype. Today, deals are more strategic, focusing on tangible assets like brand equity, distribution channels, and proprietary technology. Acquirers are conducting deeper due diligence and focusing on deals that are immediately accretive to their operations and bottom line.

3. Blurring Lines Between Cannabis and CPG: The entry of established brands like Pabst and the investments from alcohol giants like Constellation and Molson Coors indicate that the lines between cannabis and the broader CPG industry are blurring. We can expect more cross-industry collaborations, brand licensing deals, and talent migration as the market matures.

4. Focus on Profitability and Efficiency: As the market matures, the focus is shifting from growth-at-all-costs to sustainable profitability. Companies are prioritizing operational efficiency, supply chain optimization, and disciplined capital allocation to ensure they can thrive in a competitive, lower-margin environment.

Future Outlook and Stakeholder Implications

The trajectory of the THC-infused beverage industry points toward continued growth, professionalization, and integration into the mainstream consumer landscape. For investors, this means opportunities will increasingly be found with companies that demonstrate strong brand equity and a clear path to profitability. For operators, the pressure is on to build efficient, scalable businesses that can withstand market consolidation. Regulators, in turn, will face increasing pressure to create clearer, more consistent frameworks to govern this rapidly expanding market. Ultimately, consumers stand to benefit from a wider variety of higher-quality, safer, and more accessible products.

Future implications for stakeholders in the THC-infused beverage market will focus on market consolidation, operational efficiency, and increased profitability. Subscribe to our newsletter to get detailed insights on the evolving cannabis beverage industry and future insights to place your business on the road to success.