From cans to kegs, THC-infused drinks redefine the bar experience

Move over, craft beer – there’s a new drink flowing from barroom taps.

Hemp-derived THC-infused beverages, once limited to cans and bottles, are making their way onto tap lines in states like South Carolina, Wisconsin and Minnesota, offering a novel alternative to alcohol.

Although many states have passed laws restricting hemp-derived THC beverages, others allow them at liquor stores as well as establishments like bars and restaurants.

The availability of cannabis beverages on tap, such as those from Pharos Brands, blends the familiarity of a bar experience with the growing demand for non-alcoholic alternatives.

With a 5 mg dose of hemp-derived THC in every pour, Pharos’ drinks provide a mild, approachable way for consumers to relax and connect without the effect of alcohol.

For taverns, it’s an opportunity to fill unused tap lines and attract a new wave of curious consumers.

For now, Pharos is only selling its kegs in Wisconsin and does not have plans to expand the kegs elsewhere.

“We wanted to launch the kegs in a place where bellying up to the bar is such a cultural part of their experience and to make sure a cannabis-infused beverage is an option,” said Mary Bernuth, co-founder and president of Pharos Brands.

“We felt strongly that Wisconsin is the beer capital of the country – all the big beer companies are there.”

Produced in partnership with South Carolina-based Upstate Beverage Consultants, the kegs are a testament to the growing interest in cannabis as a social alternative to alcohol.

“We’ve always liked the keg concept,” said Pierce Wylie, founder of Upstate Beverage and his own brand, called Rebel Rabbit.

“It’s a unique way to bring cannabis beverages into social settings, and it’s exciting to see Pharos take this idea to Wisconsin.”

New revenue stream for taverns

The launch comes at a time when alcohol sales have softened, leaving many establishments with liquor licenses with unused tap lines.

A recent Gallup survey found that about 54% of Americans report drinking alcohol, compared with 58% in 2024 and 62% in 2023.

Pharos’ THC kegs provide a creative solution, offering bar owners a new revenue stream while meeting the growing demand for alcohol alternatives.

“Tavern operators are finding this to be a potential opportunity as tap lines from beer sit empty,” said Jerry Zavorka of distribution company Badger Cannabis, a subsidiary of Capitol-Husting/Allstate Liquor & Wine Co. and distributor for Pharos.

Meanwhile, the global market for cannabis beverages is estimated at $1.3 billion in 2024 and is expected to reach $3.1 billion by 2030, growing at a compound annual growth rate of 16.3%, according to ReaseachAndMarkets.com.

Several Wisconsin establishments have already embraced the innovation, including Orsetta in De Pere, Whitetail Inn in St. Germain and The Phoenix Taproom & Kitchen in Eau Claire.

Wylie’s Rebel Rabbit is only available in kegs in a handful of taverns in the Carolinas because he’s had trouble getting distributors to buy into the concept, but cans of the beverage are available in 14 states.

Wylie is working on developing a keg program with a South Carolina distributor to demonstrate that there’s demand for the product.

For now, Upstate Beverage only produces kegs for the Rebel Rabbit and Pharos brands, but Wylie says that’s just the beginning.

“We’re excited to see how this concept evolves,” Wylie said. “With any innovation, it takes time to build momentum, but the potential is huge.”

“We’re proud to be part of this journey and to help bring cannabis beverages to the forefront of social drinking.”

Customer feedback fuels flavor creation

As Wylie’s Rebel Rabbit brand grows, he’s introduced a program that allows customers to determine the flavors they want the company to produce.

The Lab Rabbit Innovation Program encourages customers to provide feedback about flavors.

Lab Rabbit offers a limited release of a new flavor that allows it to tap into the power of community feedback.

In April, it introduced Blackberry Lemon, which includes 10 mg of THC and a kick of 40 mg of natural caffeine.

“We made it a permanent SKU because it was so well-received,” Wylie said. “The program allows us to engage with our customers.”

The next version will be TeaHC Lab Rabbit, which will have natural caffeine because it’s brewed with tea.

“When we talk about on-premises consumption, you can get tired from some of these THC products. That little bit of caffeine can sharpen you up just enough.”

A commitment to quality and safety

Darwin Millard, technical director for St. Louis-based compliance service Cannabis Safety & Quality, wants to ensure the success of the cannabinoid beverage market.

His vision is to create a framework where low-dose beverages are accessible, safe, consistent and high quality.

“We want to see this market segment succeed,” said Millard, who’s an active volunteer with ASTM International, a standards organization that develops technical international standards for a range of products.

At ASTM, he’s taken the lead for developing standards for the cannabis industry – and is attempting to pave the way for safer and more reliable beverages with the ASTM D37 Cannabinoid Beverage Safety and Quality Initiative.

“That means putting all the right systems in place to ensure safety, quality and controlled availability,” he said.

One of the biggest hurdles is the stability of emulsions.

Cannabinoids are not water soluble, which means they require emulsions – THC molecules encased in a lipid – to evenly distribute them in beverages.

But emulsions can be unstable, leading to separation over time. While shaking a bottle might temporarily solve the issue, this isn’t feasible for larger formats like kegs.

“With a keg situation, you’re really not going to be able to shake it to restabilize the emulsion,” Millard said.

Wylie said Rabbit Rebel kegs are smaller than those used for beer and can easily be agitated.

Another challenge is with the interaction between the beverage and its packaging.

Aluminum cans, for example, require chemical liners to prevent reactions between the beverage and the metal.

However, the liners can strip cannabinoids and flavor compounds from the beverage, reducing the potency and altering the taste.

“If you strip away even a milligram from a 2-mg dose, that’s a significant loss,” Millard said.

A need for hemp-derived THC beverage regulation

To address the challenges, Millard and his team are advocating for standards and specifications that ensure the stability and effectiveness of cannabinoid beverages throughout their shelf life, including:

• Stability specifications: Ensuring that bulk emulsions remain stable and effective until their use-by date.
• Packaging standards: Identifying appropriate can liner chemistries and setting limits on cannabinoid stripping to ensure consumers receive the intended dose.

Millard also notes the need for labeling consistency, like the alcohol industry’s alcohol by volume (ABV) system.

This could include color coding or an “intoxicating scale” to help customers understand the potency and effects of the beverage.

Despite the challenges, Millard remains optimistic.

“As we fix these problems, we’re not just improving the product – we’re building trust with consumers and ensuring the long-term success of this market,” Millard said.

Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.