Over the last two years, Minnesota’s THC market has transformed the way people socialize, particularly for those seeking an alternative to alcohol. With hemp-derived THC beverages becoming more widely available and mainstream, the state has earned its title as the "weed-drink capital" of the country. This shift toward cannabis beverages is not only reshaping social norms but also presenting a unique challenge as the cannabis market is poised for further evolution.
The Rise of THC Beverages
Minnesota’s journey into THC began when low-dose cannabis drinks and edibles were legalized, sparking a rapid expansion in the market. What was initially seen as a novelty quickly became a staple at liquor stores, breweries, and social gatherings. THC beverages are now outselling vodka in some liquor stores and outperforming beer at certain breweries. In the past year alone, consumers spent over $140 million on THC products, establishing the state as a trailblazer in the hemp-derived economy.
Bob Galligan, director of government and industry relations for the Minnesota Craft Brewers Guild, commented on the significant shift in consumer behavior, saying, “I continue to be pretty overwhelmed by how many people are saying that either them or a friend of theirs doesn’t imbibe alcohol, but now they actually have something that they can go out and socially imbibe with their friends.”
For many consumers, THC drinks provide a similar social experience to alcohol, but without the downsides like hangovers or negative health impacts. This growing popularity has not only destigmatized cannabis use but has also fostered a new social scene. People who previously abstained from alcohol now have a fun, social option that allows them to join in without the need for alcohol consumption.
Quality Over Quantity
While the initial wave of THC products did well, the market has become increasingly competitive and saturated. Thousands of businesses have entered the space, from small craft breweries to large-scale retailers. However, with more options comes the need for quality control. Dan Doran, brand manager at Lupulin Brewing, notes that the focus has shifted, saying, “Initially anyone could come out with a THC product and do well, but that quickly tapered off. Now, quality is at the forefront.”
Lupulin Brewing has been a prime example of how businesses can thrive in this crowded market. The brewery’s THC beverage, Smazey, has become a significant revenue driver, accounting for 30% of sales. As more consumers try THC products, they tend to stick with them, and brands that emphasize quality over gimmicks are seeing sustained success.
This trend mirrors what’s happening across the industry, with consumers becoming more discerning and selective about the products they choose. As the market matures, businesses like Nothing But Hemp that own Vibes, Minx, Forbidden Fruit are perfectly positioned to continue their growth, focusing on delivering premium-quality THC products that meet the expectations of an increasingly sophisticated consumer base.
The Impact of Full-Scale Cannabis Dispensaries
As Minnesota’s market grows, the introduction of full-scale cannabis dispensaries looms on the horizon, set to open in the next year. These dispensaries will offer a broader range of cannabis products, including high-dose options that dwarf the 5-milligram drinks and edibles currently available. While the opening of dispensaries is an exciting development, it raises questions about the future of the hemp-derived THC market.
Tom Schoenberger, owner of Westside Wine & Spirits in St. Louis Park, pointed out that the arrival of dispensaries could change consumer habits. He notes, “Guys that smoke weed aren’t coming in buying 5-milligram gummies.” As higher-dose cannabis products become more accessible, will Minnesota’s hemp market lose its appeal?
For now, the answer seems to be no. The unique niche that low-dose THC products occupy—offering a mild, controllable experience—continues to attract a wide variety of consumers, especially those new to cannabis or looking for a gentler alternative to alcohol. The social aspect of THC beverages, in particular, makes them a strong contender to remain popular even as the cannabis landscape evolves.
A New Era for Social Drinking
THC beverages have created a new category of social drinking. Whether at a bar, brewery, or friend’s house, these products provide a way for people to relax and enjoy the social ritual of “having a drink” without turning to alcohol. With more people opting to drink less, the THC beverage market is catering to a growing demand for alternatives that still provide a buzz and a sense of inclusion in social settings.
The de-stigmatization of cannabis use has been a key factor in this shift. As more people embrace THC beverages, the conversation around cannabis has moved from taboo to mainstream, further fueling the market’s growth. Consumers who might have been hesitant to try cannabis in the past are now comfortable experimenting with THC in this form, contributing to the normalization of cannabis use in everyday life.
The Future of Minnesota’s Hemp Market
As Minnesota’s cannabis landscape continues to change, businesses must adapt to stay competitive. With the arrival of full-scale dispensaries, the focus on product quality will be more important than ever. Consumers will have a wealth of options at their disposal, and brands that can differentiate themselves with high-quality, consistent products will thrive.
For brands like Vibes own by Nothing But Hemp, this presents an opportunity to shine. By continuing to innovate and produce top-tier THC products, they can maintain their position as leaders in Minnesota’s booming hemp beverage market. As THC beverages become even more popular, companies that invest in quality and customer experience will be the ones to succeed in this rapidly evolving industry.
Minnesota’s THC Market: Winners and Losers in a Saturated Industry
Minnesota’s hemp-derived THC market has experienced remarkable growth since low-dose THC products were legalized two years ago. However, with over 4,000 businesses registered to sell these products, the market is nearing saturation, leading to a shift in how businesses operate.
Steven Brown, owner of Nothing But Hemp, witnessed the first wave of demand when customers lined up outside his St. Paul store to buy the first legal THC edibles. Now, as demand has leveled off, Brown has pivoted from direct retail to a wholesale & product development model to stay competitive. He anticipates that the oversaturated hemp-derived THC market is headed for a correction, where many brands offering similar products will struggle to survive. This shakeout, Brown predicts, won’t be caused by competition from dispensaries selling high-potency products like flower, vapes, or edibles but by the sheer volume of identical products flooding the market.
Brown points out that the hemp-derived market caters to a more casual consumer—those who might enjoy a low-dose THC seltzer at a brewery or bar rather than seeking out high-dose products from dispensaries. "There’s this huge audience that wants low-dose," Brown says. He believes that while marijuana dispensaries will serve individuals seeking high-dose, smokable, or dabbed THC, there will always be a large, loyal audience for low-dose products in more casual social settings.
Cann—a national brand specializing in hemp-derived THC—shares a similar view. The company observes that dispensary consumers typically have a baseline knowledge of cannabis and are more likely to seek out high-dose THC. In contrast, customers in traditional retail settings often have different needs, with minimal overlap between the two groups.
Rachael Dillon, co-founder of Twin Cities-based brand Mary & Jane, has noticed that some customers buying their 1-milligram “microdose melts” aren’t even actively seeking cannabis products. This highlights a growing trend where hemp-derived products are entering the mainstream, appealing to consumers looking for subtle effects and wellness benefits rather than a strong psychoactive experience.
The Challenges of a Crowded Market
As the Minnesota market continues to expand, businesses are facing increasing pressure to differentiate themselves. What was once a rapidly growing market with limited competition is now brimming with thousands of businesses vying for consumer attention. With so many similar products available, businesses must focus on product quality, branding, and consumer education to stand out.
In this environment, larger, well-established brands like Nothing But Hemp have an edge. By moving toward wholesale operations, Brown is positioning his company to provide a broader range of products to retailers across the state and country while maintaining high quality. This strategy allows him to scale while avoiding the pitfalls of direct retail, where competition is fiercest.
Low-Dose vs. High-Dose: A Diverging Market
The introduction of full-scale cannabis dispensaries in Minnesota raises important questions about how the market will evolve. While dispensaries will offer higher-dose THC products—such as potent edibles and smokable flower—Brown believes the demand for low-dose, hemp-derived products will remain strong. Low-dose THC consumers, who are often new to cannabis or prefer mild effects, are less likely to frequent dispensaries, which traditionally cater to a more experienced clientele.
This split in the market aligns with national trends. As Cann noted, there is a clear distinction between dispensary customers and those purchasing from traditional retail channels. The former group is often seeking stronger products and has more knowledge of cannabis, while the latter prefers low-dose products that are easy to incorporate into social and wellness routines.
For Minnesota brands like Mary & Jane, this means catering to a more casual consumer base. Their Sunny 1-milligram "microdose melts" are perfect for consumers looking to dip their toes into the world of THC without feeling overwhelmed by its effects. This product offers subtle effects that appeal to those not actively seeking a strong cannabis experience, further illustrating the growing diversity in the THC market.
What Lies Ahead for Minnesota’s Hemp-Derived Market
As the state’s cannabis industry matures, Minnesota’s hemp-derived THC market is likely to undergo significant changes. With the arrival of dispensaries and a crowded marketplace, smaller brands that don’t differentiate themselves will struggle to survive. However, there remains a robust demand for low-dose THC products, and businesses that focus on quality and innovation will continue to thrive.
For brands like Nothing But Hemp, the future is about embracing this evolution while staying true to the core audience. By focusing on wholesale distribution, product development and providing high-quality, low-dose THC products that cater to the casual consumer, they can remain competitive in an increasingly saturated market. At the same time, the introduction of dispensaries will create more options for consumers, further diversifying the landscape.
As the cannabis scene in Minnesota continues to grow, it’s clear that low-dose THC products are here to stay. Whether it’s a THC beverage at a brewery, a microdose melt from a local brand, or a casual gummy for social use, there’s a large and loyal audience for these products. The challenge for businesses will be finding ways to stand out in this crowded marketplace while maintaining a focus on quality and consumer satisfaction.
In the end, Minnesota’s hemp-derived THC market is a microcosm of the broader cannabis industry. As the market evolves and becomes more competitive, the winners will be those who can adapt, innovate, and deliver the best possible experience for consumers.
Conclusion
Minnesota has carved out a unique place in the cannabis industry, with its thriving hemp-derived THC market leading the charge. The rise of THC beverages has reshaped social drinking culture, offering a viable alternative for those looking to move away from alcohol. As dispensaries prepare to open and the market continues to grow, the future looks bright for Minnesota’s cannabis scene. Businesses like Nothing But Hemp are at the forefront, ready to meet the evolving needs of consumers who are increasingly looking for quality, innovation, and a fresh take on social consumption.
Source: https://www.startribune.com/two-years-in-minnesotas-thc-market-hasnt-lost-its-buzz/601134781
