High Touch

17 Jul 2025

Why Most Cannabis Beverages Fail — And What It’ll Take to Break Through

Author: SparkPlug

Emily Paxhia on the boom, the bust, and the beverage that could change everything

“I get pitched a hemp beverage almost every day. Most of them look the same — same branding, same promise, same playbook.”
Emily Paxhia, Poseidon Asset Management

Cannabis beverages are everywhere — and nowhere. Depending on who you ask, they’re either the next big frontier or the industry’s most overhyped distraction.

In our recent High Touch episode, cannabis investor Emily Paxhia helped us make sense of the moment. Having backed cannabis brands since 2013 and studied analog categories like beer, cider, and functional beverages, she’s seen this cycle before.

Here’s what she’s watching — and why she’s still optimistic.

The Opportunity Is Real — But the Execution Usually Isn’t

Cannabis drinks should be a category-defining format. They’re discreet, familiar, and social. They fit seamlessly into parties, restaurants, and concert venues. And they offer a lighter, more functional alternative to alcohol.

But despite that promise, most cannabis beverage launches fail.

“It’s asking to be disrupted,” Emily said. “Most decks look like they came from the same AI generator.”

She’s not wrong. The sameness — in branding, positioning, and flavor — has flattened what should be a dynamic category. Instead of owning a clear identity, many cannabis drinks fall into generic “relax and refresh” tropes.

What Beverage Brands Should Learn from Hard Seltzer and Craft Beer

Emily draws on experience with major CPG and beverage clients to underscore the challenge. Remember the hard seltzer wave? The market exploded, then compressed, leaving only a few winners and a sea of failed SKUs.

“Latecomers struggled because shelf space got crowded. Innovation slowed. And most didn’t have real staying power.”

Cannabis beverages, especially hemp-derived drinks, are now riding that same boom-bust curve:

  • Products are flooding into C-stores and grocery aisles with minimal regulation
  • Formulations are inconsistent
  • Branding is forgettable
  • Only a handful of players have gained real traction

The Cold Hard Truth: Beverage Is the Hardest Format

Even for the brands that get the product right, there’s another problem: distribution.

“The logistics are brutal,” Emily said. “Volume, weight, refrigeration — it’s a margin-killer.”

That’s why major alcohol companies are the ones best positioned to play here. They already have the infrastructure to ship and sell high-volume liquid products. Many are already testing the waters via hemp drinks and non-THC SKUs — and they may be waiting for regulatory clarity to go deeper.

Emily suggests that this infrastructure advantage, more than brand marketing alone, may determine who ultimately wins.

What Would a Breakout Cannabis Beverage Look Like?

So what will it take to finally break through?

Emily points to a few key ideas:

  • A clear POV: not just “it’s for women,” but a real identity rooted in lifestyle, taste, and vibe
  • A product you’d actually bring to a party, a hike, or a night in — not just consume in a vacuum
  • Smart partnerships with venues, festivals, and high-traffic spaces where alcohol usually dominates
  • Above all, a fully realized brand that feels distinct, memorable, and repeatable

“The work is never done in beverage,” Emily said. “It’s constant innovation, messaging, packaging, distribution — all of it.”

One Bright Spot: Hemp as a Stealth Distribution Channel

While the regulated cannabis market struggles to scale beverages, hemp drinks are already showing up in bars, bodegas, and music venues. Emily sees this as a possible Trojan horse for cannabis to go more mainstream.

She cites deals like Sénorita’s partnership with The Salt Shed, an iconic Chicago music venue, where hemp drinks are served just like beer or cider.

“That’s a great entry point,” she said. “People want an alternative at concerts — something with an effect, but not alcohol. That’s where drinks win.”

Final Word: Don’t Confuse Distribution for Loyalty

Even if a hemp beverage gets on the shelf, it still needs to resonate. People don’t build loyalty around compliance loopholes — they build it around experience, design, and community.

And most importantly, you only get one shot to be memorable.

🎧 Want to hear more?
Check out our conversation with Emily Paxhia on High Touch, where we go deep on cannabis drinks, retail storytelling, and the next wave of brand innovation.