Liquor stores seeing big interest in THC seltzers

Top Ten Liquors will soon open its newest Twin Cities store in Dinkytown, where owner Jon Halper is planning a massive selection of THC seltzers that will take up 20 feet of shelf space.

Why it matters: Halper and other Minnesota liquor store owners are trying to solidify a customer base of THC seltzer drinkers before the state begins licensing dispensaries where people can buy all kinds of cannabis products that could compete with the buzzed-about beverages.

State of play: Some local store owners started selling the beverages months before they were technically allowed to. But now they're in almost every store thanks to a full cannabis law passed last session.

Zoom in: Top Ten now has more than 100 varieties in its stores and is dedicating more shelf and cooler space to them.

• Halper anticipates that by October, THC seltzers will account for 10% of sales at the 13-store chain.
• At Ken & Norm's in South Minneapolis, nearly 5% of sales in July were THC seltzer, said owner Arpad Nagy.

The big picture: Minnesota has the most lenient laws for selling edible and drinkable THC, and the rest of the country is watching closely, said Max Johnson of BevSource, a Little Canada-based beverage consultancy.

• Johnson just got back from the Cannabis Drinks Expo in San Francisco, where he said all the talk on the floor was about Minnesota.
• "Minnesota could very well become the blueprint for every other state that is working to pass adult use regulation."

The intrigue: Unlike other states, consumers can buy THC seltzers in liquor stores and other mainstream retailers, which Johnson said removes the stigma and hurdles that come with buying from a dispensary.

• That means the THC seltzer market could get much larger because it opens up the product to a much wider base of customers, he added.

Between the lines: The prices for these seltzers could come down as companies invest in larger-scale production to keep up with demand, Johnson said. There's been sticker shock at the typical $20 retail price for a four-pack of 5mg cans, which is about 50% higher than craft beer prices.

The bottom line: The surge in the drinks is somewhat cannibalizing craft beer sales at liquor stores, Halper said, but it's also bringing in new revenue, which is why he's being so aggressive.

• "There's a real opportunity for liquor stores to establish themselves and their relationship with their customers and hold on to that business for a long period of time."