As Congress debates the future of hemp, brands continue looking for opportunities at the state level. While federal policy could reshape the market, operators still need to decide where to invest today. Hemp Beverage News looked at states with relatively clear regulations, favorable retail environments and growing consumer interest to identify five markets worth watching.

Minnesota: Leading the THC Beverage Market

If one state has become the blueprint for hemp beverages, it’s Minnesota.

The state was among the first to establish a dedicated regulatory framework for THC beverages. Liquor stores, breweries, and beverage companies have embraced the category, and recent regulatory updates continue to refine rather than dismantle the market, giving brands one of the clearest paths for expansion while many other states remain in flux.

Most provisions of Senate File 4401 take effect Aug. 1, expanding Minnesota’s hemp beverage framework with a new category for large-format products. Under the current rules, hemp beverages are limited to 10 mg THC per container, typically structured as two 5 mg servings. The new law allows qualifying beverages of 750 milliliters or more to contain up to 5 mg THC per serving and as many as 17 servings per container for off-site sales, creating a pathway for larger beverage formats more closely aligned with traditional alcohol and functional beverage products. The legislation also updates labeling requirements for lower-potency hemp edibles, repeals the state’s temporary hemp rules, and establishes a more permanent regulatory framework.

Another provision could prove especially valuable if Congress adopts stricter federal limits on hemp-derived THC products. SF 4401 allows businesses to hold both hemp and cannabis licenses, giving beverage companies the flexibility to participate in Minnesota’s regulated adult-use cannabis market while continuing to operate in the hemp sector.

That flexibility could become a competitive advantage. If future federal legislation significantly restricts hemp beverages, companies with dual licenses may have a pathway to continue offering higher-dose THC beverages through Minnesota’s licensed cannabis market rather than exiting the state altogether.

Wisconsin: Catching Up to Consumer Demand

Minnesota’s early embrace of hemp beverages spilled over into Wisconsin, creating one of the country’s most established regional markets for THC beverages. While Minnesota has moved toward a formal regulatory framework, Wisconsin’s market has grown amid ongoing debate over how to regulate these products.

Together, the two states have helped normalize THC beverages through broad retail availability, including restaurants, breweries, liquor stores, and convenience stores. Wisconsin lawmakers are now trying to define the rules for a market that has already taken hold across the state.

If adopted, the proposals would create a system that puts hemp beverages under alcohol’s distribution model, potentially allowing products to remain in mainstream retail channels rather than moving exclusively into licensed cannabis dispensaries.

Another proposal, AB 747/SB 682, focuses on product standards, including potency limits, testing and labeling requirements. For hemp beverages, the proposal would allow up to 10 milligrams of THC per serving and limit non-resealable containers, such as cans, to no more than two servings. The bill would also require independent laboratory testing, certificates of analysis, and sales restrictions for consumers under 21.

Not everyone supports the proposed framework. Hemp businesses, growers, and retailers argue that applying an alcohol-style distribution system to hemp beverages could significantly increase licensing, testing, and compliance costs while limiting opportunities for smaller brands. They also warn that higher taxes and stricter distribution requirements could reduce product availability in mainstream retail and push consumers toward unregulated products. Supporters counter that the bills would bring long-needed oversight, product testing and consistent rules to a rapidly growing market.

Kentucky: Creating an Alcohol Pathway for THC Beverages

Kentucky is moving to regulate hemp beverages through an alcohol-style system. The state has a population of approximately 4.6 million residents, with major population centers including Louisville, Lexington, Bowling Green and Northern Kentucky.

Kentucky has already established rules for product registration, third-party testing, labeling standards and age restrictions. Sales are limited to adults 21 and older, giving manufacturers and retailers guardrails to follow.

The state also created a distribution model that integrates hemp beverages into its existing alcohol system. The Kentucky Department of Alcoholic Beverage Control oversees the licensing structure for distribution and retail sales, allowing infused beverages to move through licensed beverage channels.

Distributor licenses are compatible with existing alcohol wholesaler licenses, and manufacturers may self-distribute and direct ship, giving even more opportunity for companies entering the market.

Retail sales are currently limited to licensed package retailers in Kentucky’s wet counties and municipalities, where alcohol sales are permitted. While Kentucky still has dry and moist jurisdictions, many of the state’s largest population centers are located in wet areas, allowing brands to reach consumers in some of the state’s largest populated areas.

Hemp beverages are not yet widely available for on-premise consumption in bars and restaurants, but Kentucky has allowed sales at certain permitted events, including festivals and outdoor gatherings. Lawmakers are continuing to consider whether to expand access further through SB 223, which passed the Senate and is awaiting action in the House.

Kentucky does not yet have statewide sales data for hemp beverages, but the Department of Alcoholic Beverage Control is required to report on the cannabis-infused beverage program in 2026. That report will give lawmakers additional insight into how the market is developing and whether further changes are needed.

Florida: A Wide-Open Hemp Market

No state offers a larger potential consumer opportunity for hemp beverages than Florida. With more than 23 million residents and more than 140 million annual visitors, the state combines population growth, tourism and one of the country’s strongest hospitality markets.

THC beverages have found a wide range of retail channels in Florida, from convenience stores and grocery retailers to liquor stores, restaurants and hospitality venues. The challenge now is whether future legislation will preserve that access or create new restrictions.

Previous efforts to restrict hemp-derived products faced strong opposition from hemp businesses and retailers, who argued the changes would disrupt a growing market and put small operators at risk. In 2024, Gov. Ron DeSantis vetoed SB 1698, citing concerns that the bill would place excessive burdens on small businesses and calling for a different approach.

Previous efforts to restrict hemp-derived products faced strong opposition from hemp businesses and retailers, who argued the changes would disrupt a growing market and put small operators at risk. In 2024, Gov. Ron DeSantis vetoed SB 1698, citing concerns that the bill would place excessive burdens on small businesses while calling for a different approach.

In 2025, lawmakers considered HB 7027, which would have created additional requirements for hemp consumable THC products, including rules around distribution, retail sales, testing and enforcement. The bill advanced through the legislative process but did not become law.

The 2026 legislative session brought renewed attention to THC beverages. HB 801 and SB 1678 proposed creating a special license for the retail sale of THC-infused beverages through the Division of Alcoholic Beverages and Tobacco, but the proposals did not advance.

Other 2026 proposals focused on hemp extract products, including restrictions on sales, advertising, testing and retail practices, but those efforts also failed to create a new regulatory framework.

For now, Florida remains one of the largest open markets for hemp beverages, with broad retail access and significant consumer demand.

Illinois: Two Markets for Two Beverages

It is unusual for a state with a robust medical and adult-use cannabis market to embrace hemp beverages the way Illinois has. THC beverages have found their way into large-scale festivals, restaurants, bars, grocery stores and liquor stores, creating a normalized social setting alongside the state’s licensed cannabis market.

While federal lawmakers grapple with how to regulate hemp beverages based on THC potency, Illinois is one of the first states moving toward a system that separates lower-dose hemp products from higher-dose cannabis products.

Beginning Nov. 12, 2026, Illinois will change how higher-potency hemp products are regulated. Products that exceed the state’s hemp limits will move into the regulated cannabis framework rather than remaining in the traditional hemp market. Unlike Minnesota, which created a dual-license structure allowing businesses to participate in both hemp and cannabis markets, Illinois is separating the two categories.

Licensed cannabis operators in Illinois can purchase and sell qualifying hemp-derived products, creating a potential pathway for beverage brands that want to reach dispensary customers. Companies selling higher-dose THC beverages will likely need to work with licensed cannabis operators, either through partnerships or by obtaining the appropriate cannabis licenses, while lower-dose hemp beverages may remain in mainstream retail channels.

These five states represent five very different approaches to hemp beverages. Minnesota continues to lead in normalizing THC beverages, Wisconsin is catching up to a market that has already taken hold, Kentucky is building around alcohol distribution, Florida remains one of the country’s largest open hemp beverage markets while lawmakers debate future restrictions, and Illinois is creating a system where hemp beverages and cannabis products can exist side by side.