Hi, there! 

This is the third of four exclusive topics we’re covering here in our newsletter as part of the broader 2025 Beer Branding Trends Report. 

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Let's get into it.


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CODO is fielding a few cannabis beverage branding projects right now and we’re having a lot of fun. 

Our team is drinking from a fire hose, figuring out label compliance and regulatory considerations, positioning and category canon, consumer education levels, Brand Architecture, and on and on. 

This space (hemp-derived beverages) feels a lot like the early days of the Beer Boom. It started small and ultra niche but the segment is expected to grow to nearly $750 Million over the next 5 years.  

So we’re seeing a lot of breweries flock towards this segment (attracted by high margins and the opportunity for incremental growth).

We’ll develop robust case studies for our current projects later on. But today, I wanted to outline a few of the recurring themes we’re seeing in our work, branding, positioning and helping breweries bring these cannabis brands to market.  

 
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A few points and caveats: 
 
– What we’re going to discuss here will apply broadly to cannabis beverage branding. We’ll set aside all the nuance between the different types of THC derivatives (e.g. hemp-derived, CBD, CBN, THC, D8, D9) and speak more to the emergent category itself. I think this will be more useful because the regulatory environment is changing so rapidly that by the time you read this, a particular product may be legal / illegal in your market anyway. 
 
– Our current projects involve helping breweries launch canna-beverages (a THC-infused NA beer and a seltzer). That doesn’t mean we’ll end up positioning these as being from these breweries, but this does matter when we discuss Brand Architecture. More on this in a moment. 
 
– Federal legalization of cannabis seems inevitable. So if you’re holding off on exploring this category due to it currently being illegal, that might not be a sound excuse for much longer. 

(Above): The Beverage Extension Assessment Tool is a purpose-built diagnostic for quickly positioning, branding and launching your next beverage. We use this on every new product launch with CODO clients.

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Here are a few things your team might consider if you’re interested in launching a cannabis-infused beer or beverage.
 
 
1

Should your brewery put out a cannabis beverage? (on early adoption)
 
Timing is crucial when considering entry into a market like this. In our last issue, discussed when it makes sense to jump on new trends, and those principles apply here as well. 
 
The cannabis beverage category is poised for excitement and growth in the coming years (the only cannabis segment forecasted to see double digit growth over the next 5 years).

However, due to varying legal statuses across the country, it's likely to become a top-heavy market dominated by a few clear winners, similar to hard seltzer and non-alcoholic beer.
 
This presents a dilemma for your brewery:
 
– Enter too early, and you risk burning resources in an underdeveloped market.
 
– Wait too long, and you might miss out on gaining crucial market share.
 
Our advice? Set FOMO aside. It's often beneficial to observe and learn before diving in. Consider these approaches:
 
A. Move now to be an early adopter, potentially gaining a first-mover advantage. But only if you've got the capital (and the energy) to confront all the challenges this presents.
 
B. Let early entrants wrestle with the initial challenges, then join once the category takes better shape. It may be harder to gain wider traction, but you may have an easier path to market overall thanks to the work of others. 
 
Both strategies can be effective but know that your location may significantly impact your starting position in this race.


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Food for thought: With a nascent category like cannabis beverage, you will have to simultaneously build your brand and the broader category itself. 

Beverages aren't currently a popular way for people to enjoy cannabis, lagging far behind edibles, flower, pre-rolls and vape.

This doesn't mean cannabis beverages won't become more common — they certainly will — but you're going to have to build broad consumer education while also building your own brand.

2

On Brand Architecture
 
One of the most important decisions you’ll have to make when positioning and branding your cannabis beverage is to what extent your parent brand acts as a purchasing driver. This choice will significantly impact your product's positioning and Brand Strategy.
 
Key Considerations:
 
1. Endorsed Brand or New Brand?
 
– Should the product be a direct extension of your brewery's brand?
 
– Should it be an entirely new, standalone brand with minimal connection to your parent brand?
 
– Or should it fall somewhere in between, with its own unique brand, but with some connection with your parent brand? 
 
2. These questions are exactly why we built our free Beverage Extension Assessment Tool (B.E.A.T.). Have everyone on your team take this quiz to quickly determine your options here.
 
3. I usually don’t like to make concrete recommendations on this sort of thing in our newsletter because every business out there will be different. Your brewery’s brand (and positioning, culture, competitive set, regulatory environment…) will all dictate the strategically-sound approach. 
 
However, I do feel strongly that for most breweries, building a new standalone brand will likely make the most sense. However, if you’re making a cannabis-infused beer vs. a cannabis beverage, that might change the conversation. More on that in a moment.
 
I say a standalone brand will likely make the most sense because the regulatory issues and stigma surrounding cannabis might make that approach “safer” for your parent brand.
 
But a more compelling reason to consider positioning your cannabis beverage as a standalone brand is…

3

Built to sell (the real opportunity at hand)
 
If you’re inclined to move on a category as nascent as cannabis, I think the real opportunity here is to build a brand that you can scale up and sell. 
 
This would be another vote for building a standalone brand vs. bringing it to market connected to your parent brand.
 
There are a lot of groups, much bigger than your brewery (e.g. Tilray, Diageo, KDP, Monster — even larger craft outfits), keeping an eye on this category. And for them, it’s far easier to buy a brand than it is to build one. 
 
If you’ve built your brewery, or brand, from the ground up, the idea of selling it off can be anathema.
 
But I don’t think you need to be as precious about a non-beer category like cannabis. Especially if you already operate a brewery. This category seems tailor-made for M&A activity (it's young, it's buzzy, it's better for you). So lean into it. 
 
If you agree and are interested in building a canna-beverage brand to sell, you need to really knock it out of the park with:
 
– A phenomenal name
– A differentiated product and unique POV
– A gorgeous brand identity and packaging
– A fun website
– A compelling brand voice and personality (continually executed well across all channels)
 
All of this will drive sales and build a strong brand, which in turn, will make you more attractive to a would-be buyer.

4 

On cannabis IP (how to protect what you build)
 
You can't currently trademark cannabis products at the federal level. Why? Because the US Patent and Trademark Office (USPTO) doesn't register trademarks for goods and services that aren't legal under federal law. 
 
Since cannabis remains a Schedule I controlled substance federally, that leaves your shiny new cannabis brand in a precarious position. This trademark limbo creates a situation where, without the benefit of federal protection, you're relying on a patchwork of state-level protections and common law rights to protect your IP. 
 
This doesn’t mean you can’t build brand equity and overall enterprise value by trademarking your key assets, but you do have to get creative and often register in adjacent classes to do so. This becomes even more important if you’re building this brand to eventually sell. 
 
I’ll stop here because this is where my lane ends. But we did discuss this idea at length with Matthew McLaughlin (Partner, McLaughlin PC + Founder & CEO, Fertile Ground Beer Co.) on a recent BBT podcast. Listen to that conversation here (the cannabis trademarking thread starts around the 10 minute mark).

5

Cannabis-infused beer vs. a canna-beverage

When bringing a cannabis beverage to market, you face a fundamental strategic choice: Create a cannabis-infused NA beer that leverages your brewing expertise, or develop a completely new cannabis beverage that stands apart from beer entirely (a seltzer, a tea, a tonic or cocktail, etc.)

This is a positioning challenge and an opportunity.

Cannabis-infused NA beer offers a clear value prop that beer drinkers can easily grasp. 

Ah, it's a beer that gives me a buzz without a hangover. Is this magic? 

This makes infused NA beers an easier entry point in the near term. And while cannabis-infused alcoholic beer will likely become legal eventually, the NA version presents a more immediate, coherent and for our money, compelling opportunity.

The cannabis beverage market is already jammed with products, many lacking a distinctive reason for existing. (I'm always amazed at what we find during competitive set audits — who funded this? Who wants this?)

This doesn't mean you can't venture beyond beer, especially if you identify a specific opportunity in your market. However, a premium, THC-infused NA beer provides an accessible concept for consumers to grasp.

One challenge worth considering is that the beer category is in decline. This raises an important question: Does it make strategic sense to connect something fresh and innovative to a category that itself needs some repositioning?

The real potential here lies in new drinker recruitment. While cannabis drinks currently represent only a small percentage of overall cannabis consumption compared to other formats, this segment is likely to resonate particularly well with younger, legal drinking age (LDA) consumers.

If your brewery is exploring fourth category products and aims to attract younger demographics, non-beer cannabis beverages could be a worthwhile consideration for your future portfolio (especially for someone who hasn't yet developed a taste, or may never will, for beer).

But in the meantime, it might be easier to make an infused NA beer.

(Above): Canna-beverage vs. cannabis-infused beer. Why contend with one set of onerous regulations when you can tackle two at the same time?! 

I'm personally intrigued by the idea of an NA beer that drinks like a beer but still gives you a hangover-free buzz. However, I'm not sure how widespread this desire is.

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Food for thought: Embrace your inner carny Meet people where they are 

This is unscientific, but most of the cannabis-infused beverages we’ve seen on the market, or worked on ourselves, have been lighter and refined. Think seltzers and sparkling waters or cocktail-y beverages. 

And this makes sense — you (and everyone else at your brewery) probably prefers more nuanced, complex flavor profiles. You like dank IPAs, dry wine, dark chocolate, straight liquors and/or boozy-cocktails, lighter roast coffee and so forth.

But if you look at the local cold box, especially a channel where something like cannabis beverages might be likely to show up (convenience), what do you see? 

Flavor bombs. Juice bombs. Big, noisy, cloying sweet beverages. 

Buzz Ballz. Beat Box. Juice Force. Twisted Tea. "Punch" seltzers. Spiked lemonades and iced teas. Hard Mountain Dew. Sugary canned coffees.

We haven’t seen too many cannabis beverages in this vein and I think that’s a huge missed opportunity. 

Don't take my word for it. Check out this research article on consumer preferences for CBD- and THC-infused beverages.

More people are willing to try, and pay more money for, sweeter THC-infused beverages (juice, tea, coffee, etc.).

And note cannabis-infused NA beer all the way on the right side. It ranked least interesting to consumers. Or at least, those surveyed for this study.

Wrapping up 
 
The cannabis beverage market is exciting. While still in its infancy, early indicators from legal markets suggest a growing consumer appetite.
 
Regulatory challenges remain a significant but rapidly evolving hurdle. However, there could be a lot of opportunities here for the right group. 
 
If your brewery is geared for innovation and brand building, and you’re always looking to see what’s around the next corner, cannabis beverages might become a pivotal part of your future business strategy.