Breweries in Minneapolis now offer hemp-derived, THC-infused drinks on tap, thanks to a new Minnesota law effective July 1. This change allows taprooms to serve these drinks on tap, not only in cans, provided they display the required label information.
Dan Schnabel, taproom manager at Headflyer Brewing, told CBS that his team anticipated the statute change and quickly adapted. “Having it on tap gives us so many different options for our consumers to taste it, to try it, to enjoy one while they’re here on site,” Schnabel said.
Regulations Made It Possible
This development follows the legalization of THC edibles derived from hemp two years ago, which are capped at 5 milligrams per serving and 50 milligrams per package. Last summer, liquor stores began selling these products, accompanied by a 10% gross receipts sales tax.
The state collected over $11.5 million in revenue from July through May, according to the Minnesota Department of Revenue.
Positive Impact On Local Businesses
Schnabel noted the positive impact on business, especially for customers seeking alternatives to beer. He also observed growing interest and expanding distribution. As the state prepares for legal marijuana sales next year, the cannabis market is poised for further growth.
The new Office of Cannabis Management reports nearly 3,900 businesses selling hemp-derived products, though only 1,873 have paid the gross receipts tax due to various exemptions and non-compliance issues.
CBS reported that with legal marijuana sales imminent, including a 10% gross receipts tax, Minnesota’s market is expected to reach $1.5 billion in annual sales by the decade’s end, according to Vicente LLP.
Read Also: $4.3B In Soft Drinks: Carlsberg Acquires Britvic In Bold Move Amid Cannabis Market Growth
What’s Behind The Hemp Hype?
Recent financial data from Beacon Securities highlights the rapid growth of the cannabis industry compared to major players in alcohol, tobacco and consumer packaged goods (CPG). Companies like Coca-Cola (NYSE:KO), Marlboro (NYSE:MO), and Budweiser (NYSE:BUD) are set to be outpaced by cannabis.
Growth Prospects
The 2023-2025 EBITDA Compound Annual Growth Rate (CAGR) reveals growth expectations: Alcohol: 6%, Tobacco: 1%, CPG: 6%, Canadian Licensed Producers (LP): 65%, and U.S. Operators: 42%. The cannabis industry shows much higher growth potential despite lower EV/Sales ratios.
Changing Consumption Patterns
For the first time, daily cannabis consumption in the U.S. has surpassed daily alcohol use. A 2024 study revealed that 17.7 million Americans reported using marijuana daily or near-daily in 2022, compared to 14.7 million daily or near-daily alcohol consumers.
This shift underscores the growing market potential for non-alcoholic cannabis products as more consumers opt for healthier and socially acceptable alternatives to alcohol.
Federally Legal
Hemp-based cannabis beverages, capitalizing on their federally legal status under the 2018 Farm Bill, present a promising alternative to alcohol. These beverages appeal to a broad market by offering customizable non-alcoholic options that deliver a mild buzz without alcohol’s adverse effects.
Some alcohol companies investing in cannabis include Constellation Brands (NYSE:STZ) and Molson Coors (NYSE:TAP), while cannabis companies like Tilray (NASDAQ:TLRY) have ventured into the alcohol industry by acquiring Montauk Brewing Company.
Read Next: Cannabis Found Less Harmful Than Alcohol In New Study: Where Is The Demand Heading? Investor Market Tips
These issues will be a hot topic at the upcoming Benzinga Cannabis Capital Conference in Chicago this Oct. 8-9. Join us to get more insight into what the wave of weed legalization means for the future of investing in the industry. Hear directly from top executives, investors, advocates, and policymakers. Get your tickets now before prices go up by following this link.
Photo: AI-Generated Image.
