Boston Beer Company Joins the Growing Cannabis Beverage Market

As interest in cannabis beverages continues to increase, Boston Beer Company (the maker of Sam Adams) recently announced plans to introduce a line of non-alcoholic, THC-infused teas, joining a number of other beverage companies in this growing market. The new product line, called TeaPot, will not be available in the United States – yet. Boston Beer is beginning its launch of TeaPot in Canada, in July, and plans to expand into the US and globally as the regulatory landscape develops. Boston Beer’s entrance into the cannabis beverage space is tailored strategically, through its creation of a subsidiary to operate in partnership with entities based in Canada that will provide the cannabis for TeaPot and manufacture and distribute the product. This approach leads to a more nimble operation than would Boston Beer’s attempting to control the entire supply chain.
Companies delving into the emerging market of cannabis beverages are overcoming a variety of challenges, including regulatory uncertainty and inconsistency. While THC sales are not federally legal in the US, a majority of states have legalized either adult-use or medical marijuana, and an increasing number are specifically allowing for the sale of beverages containing cannabis – subject to varying requirements. Canada, where Boston Beer is introducing TeaPot, currently limits the volume of cannabis-infused beverages an individual may possess, to about the volume of five twelve-ounce cans – though proposed regulations could increase this limit. Another impediment to more rapid growth in the sector is infrastructure – in Canada and most states permitting such sales, only licensed cannabis establishments may sell beverages containing THC. These establishments must sometimes purchase equipment in order to store refrigerated drinks that are far less concentrated, and therefore bulkier, than gummies, tinctures, and other cannabis products they sell.

Consumer demand is another variable influencing the cannabis beverage market – and this demand is expected to increase. Pandemic-related restrictions on gatherings have slowed the rise in demand somewhat, as consumers use cannabis beverages far more often in group settings than when alone; as these restrictions continue to ease, sales of cannabis beverages will likely increase accordingly. Additionally, Boston Beer and other companies are viewing cannabis beverages as an alternative both to alcohol and to other forms of marijuana – these beverages don’t share the social stigma of smoking, and generally contain less THC than do edibles, so they are likely to appeal to a broader audience. As the market for cannabis and the regulatory landscape continue to develop, many more companies are likely to join Boston Beer in creating THC-infused beverage offerings.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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