Herbal Profiles #75

900 Words on Building a Cannabis Beverage Brand That Lasts

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Welcome Note

Welcome back Gardeners!

I am out this week down in Miami for CannaDataCon as their event photographer! So be on the lookout for some pics and then next week I will have an overview of things I learned, my impressions and more! If you happen to be the planner or marketing manager for an event and are looking for an event photographer, give me a shout!

If you’re in town this week in Miami and want to meet up shoot me an email!

This week, I get into how you can Building a Cannabis Beverage Brand That Lasts. This article took me about 2 hours to write this week and really a culmination of the last few weeks of articles. Special shout out to Kate Bernot, Bryan Roth, and Sightlines who does amazing work and really helps me write a bunch of my stories with their excellent reporting.

I hope you enjoy this week’s newsletter

And as always, my email is always open!

-Lars

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Building a Cannabis Beverage Brand That Lasts

New research from Aaron Staples at the University of Tennessee shows consumers will happily pay $2-4 more for THC drinks compared to beer. According to Sightlines, consumers value these drinks because they deliver specific, measurable benefits beyond just the high.

The cannabis beverage market remains wide open for innovative brands. Industry data shows just twenty companies currently hold a third of the market share in hemp products. The cool part though is that the brands who are getting it right are crushing it. HOWDY hit $6m in revenue in 2024, BRĒZ did over $28m, Flyer’s grew over 280%, and Cann keeps growing as well. Their brand messaging is all very authentic and they are smart about where they sell.

Why are some brands winning while others struggle? It's pretty simple. Most functional drinks make big promises about wellness that you can't really prove. But cannabis drinks? You know exactly what you're getting and how it makes you feel. When brands nail this combo of great taste and reliable effects, people don't mind paying more, and they keep coming back for more.

This sets up an exciting opportunity for cannabis beverage brands in 2025. They're creating drinks that solve specific needs, whether that's helping you unwind after work or enhancing your social experiences. The market is ready for brands that can deliver on these promises.

Building Distribution That Makes Sense

I was talking with a founder last week about an interesting shift in distribution. Beer distributors, seeing declining traditional beer sales and the growth of alternative beverages, are actively pursuing partnerships with THC drink brands. With retailers like Total Wine & More expanding their cannabis drink sections, the distribution landscape is changing for the better, although there’s still a long way to go.

Most emerging brands feel pressure to grow fast and be everywhere. But looking at successful beverage companies, a different pattern emerges. The most sustainable growth comes when brands focus intensely on a few key retail partnerships rather than spreading themselves thin across many accounts. In practice, this often means that just 3-4 retail partners drive the majority of revenue.

This focused approach becomes even more critical for cannabis beverages. Each new retail partnership requires significant investment, training staff about your products, ensuring proper merchandising, maintaining stock levels, and building customer awareness. When you're working with fewer accounts, you can do these things right instead of just checking boxes.

Success is more nuanced than racing to the most doors, you have execute well in the right ones. Smart cannabis beverage brands are choosing distribution partners who understand both the logistics and compliance needs of the category, while focusing on retailers who can properly merchandise and market these products.

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Getting the Product-Market Fit Right

What does product-market fit look like in this category. While everyone wants to focus on new flavors and fancy packaging, the real signs of PMF are actually pretty straightforward, and they show up in your sales data.

What should you watch? Does your product move when it’s not on promotion. Anyone can sell product at a 20-30% discount. These demos and discounts might get initial sales, but sustainable growth comes from customers grabbing your drinks at full price. Even better, watch what happens after a promotion ends. Are those new customers coming back for more? That's when you know you've got something real.

The really interesting (and cool) thing that’s happening right now is that retailed are paying close attention to these metrics. They've seen plenty of brands generate buzz with flashy launches, only to sit on shelves months later. The brands that are currently winning shelf space in 2025 are the ones showing consistent sales velocity without constant promotional support.

What we all know is that sustainable growth beats rapid expansion. This is especially true in the beverage space, where building consumer trust and retail relationships takes time. Before planning that new product line or expansion market, make sure your core offering is truly resonating with your buyer personas. Focus on building genuine connections with your current customers and retail partners. When you nail these fundamentals, that's when you know you've found true product-market fit.

Execution Playbook for 2025

So how can we move the needle? So many people and brands out there are chasing a viral moment but the brands winning are focusing on something more fundamental: showing up consistently where their customers already are.

Digital marketing for cannabis beverages requires creative thinking within compliance constraints. While traditional CPG brands can boost posts or run standard ads, our industry has to be more creative. The most successful brands are finding creative ways to build community. Look at Offfield for example, they have done an amazing job of fostering a community around running and working out. They're creating content around the 'why' of their brand, elevating themselves as industry experts, and sharing authentic stories about product development with their Offfield Labs. This builds trust without relying on traditional advertising channels.

The winning formula for beverage brands: focus on building deep relationships with fewer, better retail partners. Invest in your digital presence even if you can't sell there directly. And most importantly, keep innovating on the product side - consumers are showing they'll pay premium prices for cannabis beverages that deliver consistent experiences and quality. The opportunity is there for brands ready to execute on all fronts.

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