Canada’s largest cannabis producer is aiming to penetrate the ambiguous U.S. market through an expansion of hemp-based beverages. Tilray Brands has increased its footprint in states that have the infrastructure for hemp-derived drinks, such as Georgia and Florida. The company has launched hemp-derived THC beverages in various U.S. markets, with its products now available in 1,000 stores nationwide, as reported during its latest earnings call. Sales of hemp-derived THC beverages generated $382 million in 2024, according to the Brightfield Group, with projections indicating that U.S. sales could approach $750 million by 2029.
Jared Simon, president of Tilray Wellness, noted that many of the hundreds of retailers it collaborates with in the alcohol sector, including beer and liquor stores, are receptive to increasing the availability of hemp beverages. “That’s a significant synergy for us at Tilray, and we have a network of hundreds of new distributors that we are already partnered with,” Simon stated. “We’ve consistently innovated with cannabis-driven THC in the Canadian market and have leveraged those insights to develop hemp-derived THC products here in the U.S.”
Tilray commenced the sale of hemp delta-9-derived drinks due to a loophole in the 2018 Farm Bill, enabling companies to market beverages containing up to 0.3% THC. This legal framework has facilitated the distribution of these drinks across various states. Other brands, such as Jones Soda’s Mary Jones, have also launched similar offerings.
However, Tilray has faced challenges in the U.S. cannabis market as the route to national legalization remains uncertain. The company has shifted its focus to beverages, becoming the fifth-largest craft brewer through a series of acquisitions from major beer corporations like Molson Coors and Anheuser-Busch. As traditional cannabis and alcohol sales decline, Tilray is positioning its hemp-derived drinks as wellness products that allow consumers to relax without the effects of intoxication. The company has also introduced non-alcoholic beverages within its craft beer lines.
Despite these efforts, the company’s financial health has raised concerns amid declining consumer sentiment. In its earnings call last month, Tilray reported a $700 million non-cash impairment charge attributed to “market volatility” and a perceived decreased likelihood of cannabis regulation, according to CFO Carl Merton.
Tilray’s CEO and chairman, Irwin D. Simon, expressed confidence in the company’s long-term prospects, viewing the current revenue dip as a temporary setback. He highlighted the company’s cannabis infrastructure and diversification strategy across the beverage sector. Simon envisions making hemp-derived drinks a “multi-million dollar business.” Brightfield Group indicates that more consumers are transitioning from cannabis to hemp-derived THC; a recent survey revealed that 22% of respondents considered hemp-derived drinks a potential entry point into the cannabinoid market, creating new consumer opportunities for companies like Tilray.
“I believe it’s crucial to educate consumers about what hemp-derived drinks are, what Delta-9 drinks entail, and their associated benefits,” Simon remarked during the earnings call. “This presents a significant opportunity for us.” Additionally, the incorporation of functional ingredients such as 250 mg calcium citrate in their products could enhance the appeal of their beverages, further attracting health-conscious consumers.
This story was contributed to by Sarah Zimmerman.