Why THC Drinks Are Coming To A Sports Arena Despite A Looming Federal Hemp Ban

Key Concepts

• Hemp-Derived THC: Tetrahydrocannabinol (THC) sourced from hemp, currently federally legal under the 2018 Farm Bill but facing potential prohibition.
• 2018 Farm Bill: Federal legislation that legalized hemp and hemp-derived products, including those containing low levels of THC.
• Impending Federal Ban: A provision within a recent government funding bill that, if enacted, will effectively ban the sale of intoxicating hemp-derived products.
• Green Thumb Industries (GTI): A $1.1 billion cannabis company with 105 dispensaries across 14 states, heavily invested in the hemp-derived THC beverage market.
• Rhythm, Inc.: A NASDAQ-listed company (formerly Agrify) licensed by GTI to manufacture and sell hemp-derived THC beverages (Senorita and Rhythm brands), generating $6.6 million in revenue (Jan-Sept 2025).
• Consumer Shift: Declining alcohol consumption and increasing consumer interest in THC beverages.

THC Beverages Enter Sports Arenas Amidst Federal Uncertainty

The United Center in Chicago has become the first major sports and entertainment venue in the US to begin selling THC-infused beverages, a move spearheaded by Ben Kovler, CEO and founder of Green Thumb Industries (GTI). This initiative, launched earlier this month, is occurring despite a looming federal ban on the sale of intoxicating hemp-derived products. Notably, these beverages will not be available during Chicago Bulls or Blackhawks games.

The Looming Hemp Ban and its Potential Impact

The potential ban stems from a provision included in a bill signed by President Trump last November to reopen the government. This provision effectively prohibits the sale of hemp-derived THC products, including beverages and edibles. The $28 billion hemp industry faces a significant existential threat if the ban is not overturned, delayed, or replaced with regulations before November of this year.

Rhythm, Inc., which generates revenue through licensing GTI’s brands to produce hemp-derived THC drinks like Senorita and Rhythm, generated $6.6 million in revenue from January to September 2025, and $9 million in total sales for 2024. Despite the risk, Kovler views this as a calculated risk, stating, “there's always risk with stroke of the pen policy, bans, and things like that. We see that as kind of a given. That's just part of the deal. regulatory changes for now.” He asserts that Rhythm will adapt, mirroring GTI’s experience navigating varying state cannabis laws. Should the ban take effect, Rhythm will cease selling products deemed illegal.

GTI’s Investment and Strategic Positioning

GTI has made substantial investments in Rhythm, Inc. In 2024, GTI acquired a 49.99% stake in Rhythm (then Agrify) for $18.2 million, followed by an additional $50 million investment through private placement and convertible notes. GTI also licensed its “House of Brands” – including Rhythm and Dog Walkers – to Rhythm, enabling the production and sale of hemp-derived THC beverages. Rhythm further expanded its portfolio by acquiring Senorita for $19 million in stock in 2024.

This investment is strategically timed, as Kovler observes a shift in consumer preferences away from alcohol. He points to a Gallup poll from August 2024, revealing that only 54% of Americans consume alcohol – the lowest rate in the pollster’s 90-year history. The Kovar family previously owned Jim Beam, which has recently paused production at its main distillery due to declining demand. Kovler notes, “We’re seeing people really get turned off by alcohol.” He believes nearly half of Americans are open to normalizing THC consumption, stating, “a big part of what we're doing is normalizing that.”

Competitive Landscape and Future Outlook

Kovler highlights that many competitors of GTI’s size, such as Cural Leaf, are already exiting the hemp business in anticipation of the ban. He emphasizes a consumer-centric approach, stating, “For us, the north star has always been the consumer. What do consumers want and what's going on with the product? We've seen a dramatic new category pop up at America's liquor stores and restaurants and on prem and events, which is THC beverages.”

Conclusion

Ben Kovler and GTI are proactively investing in the hemp-derived THC beverage market despite significant regulatory uncertainty. Their strategy centers on anticipating consumer demand, adapting to changing regulations, and capitalizing on the decline in traditional alcohol consumption. While the impending federal ban poses a substantial risk, Kovler remains confident in their ability to navigate the evolving landscape and maintain a foothold in this emerging market.