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The hemp and CBD category is expected to be a $1billion market by 2020 in the U.S. according to a report by Brightfield Group.

There is a lot to know about the world of cannabis-infused beverages, and the legal implications in a changing regulatory environment don’t make it any easier to keep up. Here’s a high-level look at how cannabis and beverages are coming together, and what to watch for as the market develops.

Cannabis Beverage Innovation

Medical and recreational cannabis sales are predicted to hit $11.7 billion this year and grow $25 billion in seven years. Compare that to the $38 billion in U.S. beer sales last year, and you can understand why both established beverage companies and beverage entrepreneurs are taking a closer look at methods and formulas for infusing CBD into beverages.

You can watch the innovation unfolding as CBD-infused products like CBD Living WaterTwo Flowers IPA , SteepFuze CBD Coffee, Vybes, and Cannawine hit the market and find their fans.

CBD, THC, and Alcohol

More and more companies are exploring CBD-infused alcoholic beverages with the intention of selling them across state lines. The Alcohol and Tobacco Tax and Trade Bureau (TTB) has outlined the requirements for processing domestic hemp products, whose formulation and process must be approved, along with the label before it can be sold.  Generally, once a brewer gets a formula and label approved, it will be permitted to sell across state lines pursuant to local laws. Getting approval will be the key to avoiding the risk of receiving a cease-and-desist letter like the one that Invasive Species Brewing received recently after launching craft beer infused with cannabis terpenes oil.

It is tempting to jump in on the cannabis beverage trend, but there are unique and dynamic challenges that come along with developing a sustainable and profitable CBD beverage. Having a comprehensive operational plan and the right support to execute and adjust when needed are vital elements to every beverage’s success.

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