Many hemp beverage brands are choosing to launch through the three-tiered distribution system that alcohol companies follow. The structure was built for highly regulated products, and assures skeptical politicians that the industry is operating responsibly as cannabis laws continue to evolve.

Melissa VonderHaar, Managing Director of iSee Tradeworks and a veteran in the convenience store channel, sees many THC beverage entrepreneurs coming from either the tech or cannabis spaces. She says they understand D2C and the dispensary model very well, but oftentimes they don’t understand how to navigate the three-tiered system. It’s why so many startups are recruiting veterans from the alcohol distribution industry to help them find their footing.

The trade marketing side of that system is its own discipline. It typically involves a dedicated team assigned to specific retail accounts, such as Circle K or 7-Eleven, responsible for building marketing plans, creating collateral, and ensuring the right supporting materials are delivered to each channel. VonderHaar sees trade marketing as even more critical for THC beverages than for established categories, because consumers still don’t have a strong grasp of what these products are or what they do.

That makes in-store execution everything. Shelf talkers, cooler clings, floor displays: each one is a chance to land or lose a sale. “People are in and out, spending 15 seconds looking at the cooler door,” she says. “Seven of those are finding the product they came in to find, so you have very little time.”

One tactic VonderHaar recommends for newer brands is to offer retailers suction-cup racks that attach directly to refrigerator doors. It lets stores test a product without giving up shelf space already dedicated to proven sellers. Retailers appreciate when brands invest in displays to prove the product moves as a way to earn a spot on the shelf. “It’s a disruptor and draws eyeballs,” she adds, noting that suction cup racks have been shown to lift sales not just for the featured brand but for everything else in that cooler door, too.

Be a Category Captain

Rather than showing up with just a brand plan, come up with a category plan. Offer to provide the signage that marks the THC beverage section. Bring educational materials that explain the products. Put a little branding on it, but frame the whole thing as category captainship.

It’s a playbook Coke, Pepsi, and Red Bull have used for years. Owning the home for a category builds goodwill with buyers in a way that purely pushing for shelf placement never does. Retailers notice the difference between a brand that walks in thinking like a retail partner versus one that only wants shelf space.

Early Nielsen data is starting to show what’s actually selling in the convenience channel. Sodas lead THC beverage sales, followed by seltzers, then mocktails, with teas, waters, and everything else filling out the remaining share. The soda dominance makes sense given that soda is already one of the top-performing categories in convenience overall.

What the Dosing Data Actually Tells You

Early Nielsen data on THC beverage dosing shows 10mg products capturing 51% of sales, 5mg at 22%, and higher-dose products (10mg and above) at just 5% of volume but growing fastest in percentage terms.

The dominance of 10mg over lower doses has less to do with consumer preference than with pricing. The expensive part of a THC beverage isn’t the THC; it’s the liquid, the can, and the shipping. When a 4-pack of 3mg and a 4-pack of 10mg sit side by side at a two-dollar price difference, most shoppers grab the higher dose even if a lower one would serve them better. VonderHaar says the industry hasn’t yet figured out how to price lower-dose products in a way that makes the trade-off feel rational to consumers, especially in today’s economy.

In convenience, shelf space is brutally competitive. Brands with too many flavors, doses, or package sizes can unintentionally create confusion and slow turns. Buyers often prefer a smaller lineup with proven movement over a wide assortment that fragments sales.

Tolerance is also a factor. Regular consumers build a baseline over time, and the range of what different people actually feel varies enormously, which is part of why higher-dose and shot formats are likely gaining ground.

On margins: brands and retailers are currently enjoying strong returns, but once federal regulations, taxes, and the full three-tier system are in place, those margins will compress significantly. Tobacco runs about 14% gross profit at retail. Alcohol isn’t far behind once taxes are factored in. The D2C margins that got many hemp beverage brands started won’t survive a fully regulated retail environment.

Making the Case for Shots

Shots are on the rise. Liquor stores are reporting strong velocity, and the convenience retailers that have brought them in are seeing the same thing.

Because shots are small and high-value, many retailers want them in a supervised location rather than on an open shelf to prevent theft. VonderHaar says the natural answer is checkout counter placement, but the counter in a convenience store is the most valuable real estate in the building and not easy to land. It already competes for space with 5-hour Energy, vapor displays, edibles, and other high-margin impulse items. There’s only so much room, and buyers aren’t budging for an unproven sales category.

So she advises brands to come in prepared for both objections. The first is theft prevention: a non-self-service display at the counter. The second is placement, especially when the buyer says the counter is already full or off-limits. Her solution there is a display that hangs off the back bar, keeping shots out of reach for shoppers but accessible to staff, without pulling tobacco or other staples from their spots. For a liquor store client, her team designed a freestanding unit that went behind the counter with the shot display on top and bulk storage underneath, because that store was selling through product so fast they needed restocking access built in.

The big lesson is to anticipate the objections and show up with answers rather than waiting to be turned down.

Proven sales history is the second piece of the buyer pitch. D2C numbers mean nothing to a convenience buyer. What they want to see is same-store sales data going back at least 6 months, showing not just trial but also repeat purchases. A product that gets a one-time buy and disappears won’t earn a spot on the shelf.

In a three-tier system, distributors also need to see velocity potential. Small brands competing for attention against beer, energy drinks, and RTDs have to prove they can move volume quickly enough to justify sales attention and warehouse space.

Why C-Stores May Be the Strongest Age-Gating Channel in Retail

According to the National Association of Convenience Stores (NACS), 51% of all c-store sales are age-gated products. Cigarettes are the top in-store seller, with c-stores moving over 80% of U.S. cigarette volume. Beer ranks fourth, accounting for over 40% of U.S. alcohol sales, and that’s with a meaningful number of states that don’t allow c-stores to sell alcohol at all. No other retail channel runs this much of its business through age-gated categories. FDA inspections are routine, and a failed inspection puts a store’s tobacco license at risk. VonderHaar notes that c-stores check more IDs daily than the TSA.

With 150,000 stores across the United States and a high employee turnover rate, the channel built its own solution. NACS and its standards-setting partner, Conexxus, developed TruAge, an age-verification platform funded by alcohol and tobacco companies, that scans an ID and integrates directly into the point-of-sale, so a cashier cannot ring up a restricted product without completing the check, adding an extra layer of protection for the naysayers worried about serving the underage group.

Success in the hemp beverage sector won’t come from just making it to the shelf. It takes brands that think like retailers, distributors that know how to navigate a regulated channel, and retail partners willing to make room for a new category where every inch of space is competitive.