Move over, craft beer – there is a new drink at the bar room faucet.
Once limited to canned and bottles, the cannabis-derived THC beverage is now available on tap lines in states such as South Carolina, Wisconsin and Minnesota, providing a novel alcohol alternative.
While many states have passed laws that restrict cannabis-derived THC beverages, others allow them to be in liquor stores as well as in institutions such as bars and restaurants.
The availability of cannabis beverages, such as those from the Pharos brand, combines the familiarity of the bar experience with the growing demand for non-alcoholic beverage alternatives.
Pharos’ beverages have 5 mg of marijuana-derived THC in each dump, providing consumers with a mild, approachable way to relax and connect without the effects of alcohol.
For the tavern, it is an opportunity to fill unused lightweight lines and attract a new wave of curious consumers.
Currently, Pharos only sells its kegs in Wisconsin and has no plans to expand the keg elsewhere.
“We wanted to open a small keg in a belly-like bar, which is a cultural part of their experience and make sure we can choose a cannabis-infused drink,” said Mary Bernuth, co-founder and president of Pharos Brands.
“We strongly believe that Wisconsin is the beer capital of the country – all the big beer companies are there.”
The keg produced in collaboration with a South Carolina-based Upstate beverage consultant demonstrates an increasing interest in cannabis as a social alternative to alcohol.
“We have always loved the keg concept,” said Pierce Wylie, founder of Upstate Beverage and its own brand.
“It’s a unique way to bring cannabis drinks into the social environment and it’s exciting to see Pharos bring the idea to Wisconsin.”
New revenue streams for taverns
The launch is a time when alcohol sales are reduced, providing many agencies with unused lightweight wires with alcohol licenses.
A recent Gallup survey found that about 54% of Americans reported drinking, compared with 58% in 2024 and 62% in 2023.
Pharos’ THC kegs offer a creative solution that provides a new revenue stream for bar owners while meeting the growing demand for alcohol alternatives.
“Bambas operators think this is a potential opportunity because the taps of beer are empty,” said Jerry Zavorka of Badger Cannabis, a subsidiary of Capitol-Husting/Allstate Liquor & Wine Co. and a distribution company for Pransional.
Meanwhile, the global beverage market for cannabis beverages is estimated to be USD 1.3 billion in 2024 and is expected to reach USD 3.1 billion by 2030, growing at a CAGR of 16.3%.
Several Wisconsin institutions have embraced the innovation, including Orsetta in De Pere, Whitetail Inn in Saint-Germain and Phoenix Taproom & Kitchen in Eau Claire.
Wylie’s Rebel Rabbit is only available in a handful of taverns in the Carolina because it’s hard for publishers to buy the concept, but drink cans are available in 14 states.
Wylie is working with South Carolina distributors to develop a keg program to demonstrate demand for the product.
For now, Upper State Drinks only produces kegs for the Rebel Rabbit and Pharos brands, but Wylie says it’s just the beginning.
“We’re very happy to see how this concept develops,” Wylie said. “With any innovation, building momentum takes time, but the potential is great.”
“We are honored to be part of this journey and help bring cannabis drinks to the forefront of social drinking.”
Customer feedback on fuel creating flavor
With Wylie’s Rebel Rabbit brand growing, he introduced a program that allows customers to determine the flavors they want the company to produce.
The Lab Bunny Innovation Program encourages customers to provide feedback on taste.
Lab Rabbit offers limited new flavors that allow it to leverage the power of community feedback.
In April, it introduced blackberry lemon, which included 10 mg of THC and 40 mg of natural caffeine.
“We are a permanent SKU because it is so popular,” Wylie said. “The program enables us to interact with our customers.”
The next version will be TeaHC Lab Rabbit, which will contain natural caffeine as it is brewed with tea.
“When we talk about local consumption, you may get tired with some of these THC products. A small amount of caffeine can make you sharper.”
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Commitment to quality and safety
Darwin Millard, technical director of cannabis safety and quality, based in St. Louis, wants to ensure the success of the cannabinoid beverage market.
His vision is to create a framework in which low-dose beverages are available, safe, consistent and high-quality.
“We want to see success in this market segment.” Millard is an active volunteer at ASTM International, a standards organization that develops international standards for various products.
At ASTM, he leads in setting standards for the cannabis industry – and is trying to pave the way for safer and more reliable beverages through the ASTM D37 Cannabis Beverage Safety and Quality Program.
“This means putting all the right systems in place to ensure safety, quality and controlled availability,” he said.
One of the biggest obstacles is the stability of the lotion.
Cannabinoids are not water soluble, meaning they need lotions (THC molecules wrapped in lipids) to be evenly distributed in the beverage.
But the lotion can be unstable, causing separation over time. While shaking the bottle may temporarily solve this problem, for larger formats such as small buckets, this is not feasible.
“In the case of a small bucket, you really can’t shake it to vibrate the lotion,” Millard said.
The rabbit rebel keg is smaller than the one used for beer and is easily excited, Wylie said.
Another challenge is the interaction with the beverage and its packaging.
For example, aluminum cans require chemical lining to prevent reactions between beverages and metals.
However, the lining can peel off cannabinoids and flavor compounds from the beverage, thereby reducing potency and changing taste.
“If you even take one milligram out of a 2 milligram dose, that would be a huge loss,” Millard said.
Need for cannabis-derived THC beverage conditioning
To address the challenges, Millard and his team are advocating standards and specifications to ensure the stability and effectiveness of cannabinoid beverages throughout the shelf life, including:
- Stability Specifications: Ensure that the bulk emulsion remains stable and effective until its use date.
- Packaging Standards: Determine the appropriate lining chemical kit and set limits for cannabinoid peeling to ensure that consumers receive the expected dose.
Millard also pointed out the need for consistency in labeling, such as alcohol (ABV) systems in the alcohol industry.
This may include color codes or “intoxication scales” to help customers understand the effectiveness and impact of the beverage.
Despite the challenges, Mirad remains optimistic.
“When we solve these problems, we can not only improve the product—we are building trust with consumers and ensuring long-term success in that market,” Millard said.
Margaret Jackson can be reached Margaret.jackson@mjbizdaily.com.
