As hemp beverage brands race to secure shelf space in convenience stores, liquor stores, and mainstream retail channels, many are discovering that the next challenge facing the industry is aluminum cans.

In 2026, can supply has tightened significantly. Ball Corporation, the world’s largest metal beverage container manufacturer, reported that 2026 production is “sold out” and remains capacity-constrained until a new Oregon plant comes online later this year. At the same time, tariffs on sheet aluminum and finished cans are keeping packaging costs elevated.

For hemp beverage companies still scaling, the packaging squeeze will only add to their already slim margins.

Rising Costs Across the Beverage Industry

Aluminum prices have remained under pressure in 2026, with raw aluminum in North America reaching $2.43 per pound in March 2026, continuing a multi-month upward trend. The Brewers Association says the updated tariff framework still applies a 50% tariff to sheet aluminum and finished cans, while some derivative products, such as lids, have moved to a 25% tariff.

Manufacturers are also confronting higher costs as aluminum prices, tariffs, and supply chain pressures push packaging expenses upward. For multinational beverage corporations, rising packaging costs are often absorbed across massive production volumes and diversified product portfolios. Smaller brands have fewer options and will feel the squeeze the most.

Why Hemp Beverage Brands Feel the Pressure First

Since hemp beverage companies are still scaling compared to the broader beverage market, they lack the same leverage as larger companies to navigate aluminum can headwinds. Unlike established soft drink and beer manufacturers, most hemp beverage brands purchase significantly smaller quantities of cans and often rely on third-party co-packers for production.

Packaging consultants note that aluminum cans can cost roughly $0.12 to $0.19 per unit, depending on size and print complexity. A one- or two-cent increase may seem small, but when combined with freight, distributor margins, retailer markups, and promotions, it can meaningfully affect profitability. For context, packaging costs already represent 20–30% of COGS for a small beverage brand; an increase will be tough.

Co-packers report that smaller beverage runs are facing longer lead times and higher minimum order requirements as can capacity tightens — with some suppliers now requiring minimums of 100,000 units or more per SKU, a threshold many emerging hemp brands struggle to meet. Beyond pricing, co-packers may prioritize their largest clients during capacity crunches, leaving smaller hemp brands to lose their production slots entirely, not just face higher costs.

The challenge becomes even greater as brands enter larger retail channels where pricing expectations are often fixed and competition for shelf space is intense.

Growth Is Creating New Operational Challenges

As consumer demand grows and distribution expands, hemp brands must navigate scale while maintaining highly efficient operations. The category is expanding while packaging costs remain volatile, making packaging an increasingly important factor in profitability.

75% of all new beverage launches across North America are now packaged in aluminum cans, more than double the rate of five years ago. Meanwhile, the cannabis-infused beverages market is projected to reach $1.37 billion in 2026, up from $1 billion in 2025 — both trends intensifying demand for cans just as capacity tightens.

The timing is particularly challenging, as the 2026 FIFA World Cup kicks off on June 11 and runs through July 19, with 104 matches played across the U.S., Mexico, and Canada. Ball Corporation’s president, Ron Lewis, said the World Cup and summer celebrations are “inspiring bullish sentiment for demand,” and the tournament is expected to boost global beer sales by 1 billion pints.

The packaging squeeze is further complicated by the November 12, 2026, federal ban on intoxicating hemp-derived products. The regulatory uncertainty makes demand forecasting significantly harder — and makes it difficult for brands to justify signing the kind of long-term supply agreements that would otherwise offer pricing stability and guaranteed capacity. Brands are being asked to make major packaging commitments at the exact moment their product’s legal future is unresolved.

Hemp beverage brands must figure out how to build a packaging strategy that supports profitable growth when cans are expensive, lead times are longer, and suppliers are stretched.

Beyond the Can

Some beverage companies are evaluating alternative packaging formats, adjusting package sizes, or rethinking production strategies to manage costs better. Others are seeking longer-term supply agreements that offer greater pricing predictability, though the looming federal ban complicates those conversations for hemp-specific brands.

Options include shifting to stock cans instead of printed cans, using plain cans with applied labels, or adjusting pack sizes to optimize case efficiency. It’s worth noting that applied labels, while more accessible during supply crunches, are a visual step down from printed cans at retail. This tradeoff can affect shelf presence and consumer perception at a moment when the category is still fighting for mainstream brand awareness. Brands can also explore glass, cartons, or multi-packs in PET where brand positioning allows. Some brands are also exploring purchasing cooperatives or joining co-op buying groups to aggregate volume and access better pricing and MOQ terms — an approach more common in craft beer that is beginning to gain traction in hemp beverages.

What’s Next for Can Supply

Industry analysts do not expect meaningful tariff relief in 2026. Treasury Secretary Scott Bessent has said that while the administration might consider rolling back some tariffs on finished goods, the 50% Section 232 duties on primary aluminum are likely to remain a permanent fixture. Trade advisors have called the Section 232 protections “sacred” with a “no exemptions” policy.

Goldman Sachs has warned that the Middle East conflict has triggered a supply crisis: “Middle East missile attacks have severely impacted 4% of global aluminum capacity. Goldman Sachs urgently raised its aluminum price target for Q2 2026 to $3,450/ton. The global aluminum market has sharply reversed from a 550,000-ton surplus to a 570,000-ton deficit – but this window is fleeting. In 2027, a major supply return will bring a surplus of 1.3 million tons; timing is everything”.

Ball Corporation expects its new beverage can manufacturing facility in Millersburg, Oregon, to come online in the second half of 2026, which will add capacity but won’t resolve the current “sold out” status for 2026 production. Ball’s CEO Ron Lewis said during the company’s Q1 2026 earnings call: “There’s a real demand pull for cans. We don’t have to push it. It’s naturally happening”.

Bank of America analyst George Staphos is more optimistic about demand, writing: “We think FIFA World Cup 2026™ should be another good year for the beverage-can industry and the associated stocks. Cans continue to gain share across beverage categories, outperforming glass and plastic as the preferred packaging format for new products. He added that the World Cup in the U.S. represents a tailwind for beverage consumption, and that cans are poised to capture a disproportionate share of the benefit.

Bank of America forecasts the global aluminum market will enter a deficit of 292,000 tons in 2026, with Goldman Sachs predicting a major supply return in 2027 that could bring a surplus of 1.3 million tons — depending on recovery timelines for damaged smelters and Chinese policy changes. For now, the U.S. aluminum market is likely to remain in a state of “perpetual tightness,” with the Midwest Premium at record levels.