The hemp beverage industry is graduating beyond standard seltzers, sodas, and teas into sophisticated formats that echo fine wine, craft beer, and premium spirits. Mixologists across the country now use THC spirits to create elevated cocktails for on-premise menus, setting the stage for a new era of crafted beverage consumption.

One distributor navigating this shift is Meredith Sherman, founder of Atlanta-based Division USA. Having spent two decades in the fine wine and spirits sector, including managing distribution strategy for legacy houses like Moët Hennessy, she developed a deep appreciation for craft producers, terroir, and the nuanced stories behind each bottle.

However, Sherman also saw how craft producers were consistently swallowed up by high-capital brands, leaving them with little leverage with major distributors. Watching the rapid rise of hemp-derived THC beverages, she saw an opportunity to apply her background to a new craft sector. In August 2024, she stepped out of the wine world to launch Division USA, a boutique firm built specifically to give craft hemp drinks a better path to market.

The Incubator Model and Field Activation

Traditional alcohol distributors are built for scale. They focus on established brands that can fulfill massive orders, run national campaigns, and move product quickly off shelves. For smaller craft producers entering the market, fitting into that system is a challenge, as big houses naturally favor their highest-volume accounts.

Rather than trying to push multiple brands through traditional high-volume channels, Division USA limits its portfolio to a small group of craft producers. Keeping the roster small gives Division USA the bandwidth to build individual brands, offer hands-on support to independent bottle shops, and run active field programs.

It is a strategy familiar to the premium wine world Sherman came from. Many boutique wineries spend years building a reputation in their local markets, developing relationships with restaurants, independent wine shops, and sommeliers before expanding distribution. They create demand through tastings, wine dinners, and direct consumer experiences, then enter new markets selectively as demand grows. For many luxury producers, controlled growth is also part of maintaining quality and exclusivity.

Retailers are currently cautious about placing new inventory orders due to potential federal hemp restrictions. To keep momentum going, Division USA takes a grassroots approach—bringing brands straight to consumers through music festivals, hospitality gatherings, and tasting events to drive real product trial off retail shelves.

Ultimately, the goal is to incubate these craft brands through the industry’s messy growth phase, building the consumer demand and brand equity necessary to transition them smoothly into major distribution networks as regulations normalize.

The Economics of Hemp Beverages: Common Mistakes & Pricing Realities

Many emerging hemp beverage founders enter the market from outside the traditional consumer packaged goods (CPG) or beverage alcohol industry, facing a steep learning curve that can lead to financial repercussions. Sherman attributes a poorly launched strategy to what she calls the “Kool-Aid Man” effect: overenthusiastic founders rushing headfirst into production and scaling up inventory long before establishing a cohesive go-to-market strategy. They end up with capital locked away in overstocked warehouse inventory that cannot be used to grow the business.

Another common pitfall Sherman sees is the self-distribution pricing trap. Brands that launch by selling directly to retailers often set a low retail price that early customers get used to—say, $4.99 a can. What these founders fail to account for is how transitioning to a traditional distributor will affect the shelf price. Once you factor in distributor markups and retailers’ margin expectations, maintaining profitability requires a significant price increase. Convincing existing customers to pay $6.99 or $7.99 for a product they are accustomed to buying for less can severely slow sales and alienate early adopters.

New operators unfamiliar with calculating costs associated with the 3-tier system frequently overlook how compounding supply chain costs, middleman margins, and distributor markups add up—ultimately driving up the final shelf price paid by the end consumer. And when incoming state excise taxes and per-milligram fees are eventually applied, the prices will rise even more.

Georgia Market Snapshot

Like many states, Georgia is actively trying to build a regulatory framework for a hemp industry that emerged practically overnight. State agencies and lawmakers are constantly scrambling to establish boundaries, creating a patchwork of moving rules that operators must continually adapt to.

At present, Georgia’s licensing entry fees remain a low barrier—a wholesale permit runs $500, while a retail permit costs $250—and the state has layered on specific operational guardrails:

• Container Caps: Products are limited to 12 ounces with a maximum of 10 mg of Delta-9 THC per serving.
• Format Restrictions: Edibles are restricted to gummies, while THCA products and non-gummy food items remain banned.
• Channel Constraints: Under state revenue guidelines, full-package liquor stores cannot sell hemp drinks, pushing the category toward independent wine markets, craft bottle shops, and specialized retail.

While Georgia’s hemp market currently operates under agricultural oversight, standard tax and revenue frameworks will eventually be implemented as the category matures.

Product Innovation: Terpenes, THC Wine, and the Future of Luxury

Coming from fine wine, Sherman asserts that flavor alone and THC potency are not enough to label a product premium. While consistent manufacturing is expected, she says moving into the luxury space comes down to plant genetics and ingredient quality.

As mixed drinks become the next category the industry builds for, she points to Orinda—a premium botanical spirit crafted in Chattanooga using strain-specific terpenes, such as Durban profiles sourced from Sonoma Hills Farm. It is designed to satisfy tequila and vodka drinkers seeking depth and complexity without alcohol.

Sherman sees the future of high-end hemp drinks in strain-specific chemovars, full-spectrum formulations, and rich terpene profiles. Just as terroir and varietals define fine wine, leveraging specific plant genetics and terpene profiles helps craft drinks stand out on the shelf and command a higher price point.

She also highlights the functional benefits of including minor cannabinoids, such as CBG, alongside strain-specific terpenes. Together, they interact with the body’s endocannabinoid system more effectively, delivering a balanced experience that supports a stronger market position.

Activation Strategy: Building “Demand Before Supply”

Brands typically rely on distributors to flood store shelves and hope sales will follow. Division USA flips that model, focusing first on generating local demand before pushing for mass retail placement.

The core of this strategy is grassroots field marketing—getting “liquid to lips” where target demographics already spend their time. Rather than relying on traditional advertising, Division USA shows up at music festivals, lifestyle gatherings, and cultural events. For example, during the launch of Grateful Fred, a brand tied to the Grateful Dead community, the team brought the product directly to fans at “Jerry Day” memorial events. This allowed hundreds of people to experience the drink in a natural, high-energy setting.

By the time the product hits local shelves, the team has already built initial brand recognition. Instead of asking a shop owner to take a gamble on an unknown product, the team can show retailers tangible proof that local consumer demand already exists.

To expand this community-first approach, Division USA is also rolling out educational events, such as “Wine & Weed” gatherings. These sessions bring diverse and sometimes skeptical consumers together in a comfortable, familiar environment. By hosting tasting-style events, they can reach new audiences, reduce lingering stigma, and educate consumers on the nuances and effects of hemp beverages before they buy.

Sherman isn’t trying to build the largest distribution company in hemp beverages. Instead, she’s focused on helping craft brands establish a strong foundation before they pursue broader distribution. The approach reflects the premium wine world she came from, where many boutique producers build their reputation market by market, earning loyal customers and retail support before expanding into new territories.