Target begins selling hemp-THC drinks in MN 🎯

TARGET
Target begins hemp-THC pilot program in Minnesota 🎯

Now coming to a Target $TGT ( ▲ 1.76% ) near you: Weed drinks.

What happened: The big-box retailer is beginning a pilot program to sell hemp-derived THC drinks in ten Minnesota stores, multiple people confirmed to me. Brands like Trail Magic and Surly Brewing Co, along with others will be part of the pilot program. 

Buyers must be over the age of 21, and the drinks are limited to 5mg of THC per can. 

What they’re saying: “This launch validates years of hard work by hundreds of people and brands across our industry who have led with safety, consumer education, and a desire to meet the needs of a new generation,” Trail Magic cofounder Jason Dayton said on LinkedIn. 

Target did not immediately respond to a request for comment, though a spokesperson confirmed the pilot program to Bloomberg News.  

And: “I don’t see how you can be in any part of cannabis, hemp or MJ, and not see this as a major step towards normalization that will help justify full legalization,” Adam Terry, the founder and CEO of hemp-THC drink brand Cantrip said.

CanTrip is not involved in the pilot program. Terry joined Cultivated Live last year to chat about the hemp drink market. 

Zoom in: Hemp-derived THC drinks are federally legal in the US via the 2018 Farm Bill. 

As a reminder, hemp and cannabis are biologically the same plant. The difference is purely legal.

Hemp is defined by the federal government as cannabis containing less than 0.3% THC, an arbitrary designation that nonetheless creates a pathway for these products to now be sold in big-box stores.

Target follows Total Wine & More and others in selling these hemp-derived THC drinks. The push is led by a venture capital-fueled explosion of brands taking advantage of a shift in drinking habits. As Gen-Z consumes less alcohol, THC drinks may become a lucrative alternative. Distributors and retailers, contending with flagging liquor and beer sales, surely want to take advantage of that trend. 

Some analysts expect THC drinks to hit nearly $4 billion by the end of the decade, and that could be undercounting if regulations ease. 

But, but, but: Multiple states have pushed to rein in hemp-derived THC products. Ohio Gov. Mike DeWine signed an executive order on October 8 requiring retailers to stop selling these products.

The Texas legislature attempted to pass similar legislation multiple times, but ultimately could not get a bill through. Gov. Greg Abbott signed an executive order outlining rules for sales.

And California Gov. Gavin Newsom signed a bill that would force hemp-derived THC drinks to be sold through regulated dispensary channels, creating coherent regulations for both hemp and traditional cannabis-derived THC — meaning Target’s pilot program wouldn’t work there.

Our take: I’ve frequently written in this newsletter that THC should be regulated as THC, whether it comes from legally defined hemp or regulated cannabis. 

Target’s pilot program is a major step toward normalization. If it makes business sense for Target, licensed cannabis retailers should have the same distribution opportunities, especially for lower-dose products, as their hemp counterparts.

I’d like to be able to purchase my favorite THC drinks at Stop & Shop, or at the Barclay’s Center while watching a Nets gane. So would many consumers. Target’s bold step could help force lawmakers to make that a reality. 

-JB

“Somehow you got people that are going to spend a lot of money to basically make us California through the back door with these initiatives and these amendments,” Florida Gov. Ron DeSantis said on Saturday, per Florida Politics, referring to his multimillion-dollar campaign to defeat cannabis legalization in Florida. “And let’s just be honest, they were pushing issues in which probably more people agreed with them than agreed with me or agreed with us.”

The DeSantis Administration spent heavily — in both money and political capital — to sink cannabis legalization last year. The measure received over 56% support, a strong majority, but failed to clear the 60% threshold needed to become law.

LIT ALERTS’ INSIGHTS
National edibles’ brands winning in NY and NJ

The Greater New York City and Philadelphia effect on both the New York and New Jersey cannabis markets is felt in many ways, but one trend is clear: the convenience and discrete form factors are taking up share and commanding more and more of consumers' attention.

The convenience and discrete form factors include vapes and edibles and these are the categories where national brands have found their footing in the highly coveted, densely populated East Coast markets.

Today, Lit Alerts is highlighting the national edibles brands who have landed and expanded in the New York and New Jersey markets.

Looking at estimated sell-through in the last 90 days, 3 brands from the West Coast stand out in these core East Coast markets.

Grön | Most impressively holding the #1 spot in New Jersey and #2 in New York (only behind New York's Off Hours).

Wyld and Camino | Swapping the #3 and #4 spots in New York and New Jersey these two West Coast brands are chasing Grön, as well as the giants of New York (Off Hours, Ayrloom, Jaunty).

If you're looking to take share in the New York and New Jersey edibles markets, you'll have to go through one of these brands.

Lit Alerts will provide a look at the national brands winning share in the vape category in an upcoming weekly insight — for now, have a look at Lit Alerts’ exclusive insights into national edibles brands winning in New York and New Jersey. 👇

To learn more about Lit Alerts and get a special offer only available to Cultivated readers, visit litalerts.com.

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