Massachusetts-based Theory Wellness is betting big on the cannabis beverage category by opening the first dispensary dedicated to infused libations.

Thomas Winstanley, Theory Wellness’ chief marketing officer, said the company has long appreciated the potential of cannabis beverages. While the category represents about 1% of Massachusetts' total cannabis sales, Headset reported cannabis beverages sales grew 53% year-over-year from 2021 to 2022. Furthermore, Theory Wellness has seen beverage sales increase year-over-year from 2% to 3% at its own dispensaries.

After installing a canning line at its production facility in Bridgewater, Theory Wellness launched its line of Hi5 seltzers in 2021, selling one million cans in the first six months. The brand has since expanded to include sodas and energy drinks, with a beverage enhancer soon to follow.

“We think beverages are a big part of the future in this space,” he said. “We hope to be an accelerator of that growth. One of the insights we've always heard is that there are a lot of people who are canna-curious, who want to have a very low-level entry point into the space that's not requiring them to smoke something or vape something, or even edibles that can be hard to control. We think this is a product category that bridges a much bigger gap with the consumer segment.”

Photo from Theory Wellness

The Hi5 brand’s colorful graphics served as inspiration for the beverage dispensary, which will be co-located alongside a traditional dispensary in Medford, about five miles northwest of Boston. The dispensaries will share a license and a building that once served as Volkswagen dealership, offering ample vault space and guest parking.

Slated to open this month, the beverage dispensary’s retail footprint occupies 750 sq. ft., similar to a bodega or small package store. It will feature floor-to-ceiling coolers, as well as podiums for leaders in the Massachusetts beverage space to create the brand experiences for customers. So far, Theory Wellness has tapped Cann, LEVIA and Good Feels as premiere partners.

“We want them to be as much about the story as we are because they have done a lot of great work to make beverages what they are as a portfolio for products in Massachusetts,” Winstanley said. “We want to celebrate their success as much as we can because a rising tide raises all ships. We wouldn't be where we are without partners like them. It's a very exciting proposition, and they have been fantastic to work with all the way through, and that's why we're trying to give a lot of love to them throughout this entire journey.”

Winstanley noted Theory Wellness is in talks with several of the state’s 80-plus cannabis beverage brands, but he added products with hemp-derived THC will not be included at this point, citing Massachusetts regulations. 

“For what our needs are today and where we're going, we want to keep this as true to the legal industry in Massachusetts for the Cannabis Control Commission and the regulators as possible,” he said.

On-site consumption is also prohibited, but the dispensary’s beverage partners can offer guests uninfused samples. However, Massachusetts regulators have been deliberating how to implement consumption lounges, which Winstanley said would be a driver for the cannabis beverage category.

Photo from Theory Wellness

To increase competitiveness and consumer accessibility, Theory Wellness and its partners plan to offer their beverages at a roughly 50% discount compared to suggested retail prices for similar products.

“As a vertically integrated company, we always buy wholesale, but we produce so much of our own products that this is a very different model in which we're trying to bring in more beverage partners to participate,” Winstanley said. “One of the bigger points of differentiation is that through our partnerships we are going to be providing the best pricing of cannabis beverages in the state.”

Winstanley noted Theory Wellness is eager to see how the beverage dispensary concept plays out, adding the company could consider expanding it if it succeeds.

“As much as we're doing this because it's fun and exciting and we love it, we're really doing this for our consumers in the sense that we want to provide them with an experience that we've heard from them is of interest,” he said.