Beer Buds

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As cannabis-infused drinks proliferate, more and more beer brewers are getting in on the game with their own alcohol-free THC beverages. Could cannabis be a brewer’s next best friend?

WORDS Leslie McMann

Throughout the last few years, the world has witnessed a remarkable transformation in both the brewing and cannabis industries. With the gradual legalization of cannabis in various states, a new frontier has emerged for breweries willing to venture beyond traditional beer making. This revolution has given birth to a fascinating trend—breweries crafting cannabis-infused beverages alongside their standard offerings.

In many ways, beermakers turning to cannabis drinks makes practical sense. Breweries are already equipped with most of the machinery and infrastructure needed to brew, can and sell beverages, whether they contain alcohol, hops or THC. But considering the year over year downward trends seen with overall alcohol consumption, the opportunity for diversification is attractive to many in the beer industry who want to reach low- or no-alcohol drinkers. New offerings can include THC-infused beers, CBD-infused seltzers and other creative concoctions that blend the worlds of brewing and cannabis, minus­ the alcohol.

But despite demand from customers for non-alcoholic, infused drinks, venturing into cannabis is no guarantee of success for many brewers. We spoke with three independent craft brewers who expanded to producing cannabis drinks about the challenges of their local­ markets and the success or failure of their infused-beverage ventures.

Kevin Smith, Bale Breaker Brewing Company
Yakima, WA

Founded in 2013, Bale Breaker Brewing Company’s brewery and tap room sit on the same land where cofounder and brewmaster Kevin Smith’s family has been farming hops since 1932. The farm, Loftus Ranches, continues to grow more than 2,000 acres of hops each year, which go directly towards making Bale Breaker’s various sought-after IPAs.

With generations of experience growing hops, it wasn’t a huge leap for Smith and his family to consider growing cannabis as well.

“We were always interested in the cannabis market since Washington State legalized recreational use,” says Smith. “With our family’s knowledge of hops, we felt it was natural to migrate to its ‘cousin plant.’ ” But Washington state regulation initially prevented the Smiths from launching their own venture.

“At the time we began getting interested in the cannabis market, the state of Washington was not issuing any more grower or processor licenses,” explains Smith. “While we initially thought we were out of luck, we got word that one of our friends was looking for some possible investment in his company.”

The company was Painted Rooster Cannabis Company, which Smith now co-owns.

Photo courtesy Sungaze Cannabis Company

What was Smith’s first plan after becoming co-owner of both a successful brewery and a licensed cannabis farm? Creating THC-infused beverages.

“Those of us at Bale Breaker truly believe that cannabis beverages are the next frontier in the drink world,” says Smith. “Our thought is that drinks—beer, wine, cocktails, coffee and tea—have been an integral part of social interactions for hundreds of years. However, marijuana has never had a seat at that table. With more and more states legalizing the recreational use of cannabis, we believed the growth in that segment could potentially be tremendous.”

Sungaze, their brand of low-dose seltzers in flavors like Lemon Ginger, Lime Agave and Strawberry Citrus, is available in dispensaries across Washington.

Although Smith’s expertise in brewing and background in farming makes him highly qualified to lead a brewery’s first venture into infused beverages, Washington State’s regulations on alcohol and cannabis do prevent the mixing of the two businesses. None of Bale Breaker’s brewing equipment can be used to process cannabinoids. And although Sungaze is marketed as a collaboration between Bale Breaker and Painted Rooster, “all of our production is done onsite and canned at Sungaze,” says Smith.

When the brand launched, “the reaction was very positive,” he says. “Everyone that tried Sungaze was blown away by how clean and refreshing they are. Even our 10-milligram drinks have little to zero cannabis flavor in them whatsoever. They basically just taste like a craft-style lemonade that give you a tiny buzz.”

Washington regulations prevent Smith from serving Sungaze at the Bale Breaker taproom, but do not prevent him from advertising the infused beverage line via posters, fliers and on social media (well, as best as anyone can do anything cannabis-related on social media). Sometimes, Smith explains, “we get people showing up at the brewery looking for cannabis drinks.” While customers occasionally look for the cannabis-infused line at the brewery, they have to be directed to the nearest dispensary if they want to buy Sungaze.

Despite positive reactions from customers, Smith blames unclear or misguided regulations in Washington for what he describes as “underwhelming” sales. Citing a local law that has impacted his business most, Smith explains, “in Washington State, a consumer is only allowed to purchase up to 72 ounces of liquid edibles per transaction regardless of the number of milligrams of THC per unit. We attempted to change the law to allow a different limit for low-dose drinks. We garnered over 95 percent of support from both the state house and senate. However, it failed to get attached to a bill and died.”

As a result, Sungaze is now preparing to launch “shooter” sized beverages infused with 100 milligrams of THC in order to try and combat the effects of the law and gain higher profits.

Keith Villa, cofounder of Ceria Brewing Company / Photo courtesy Ceria Brewing Company

Keith Villa, Ceria Brewing Company
Arvada, Colorado

Keith Villa has dedicated himself to changing perceptions around alcohol-free beer—namely, that it can still be as delicious as a traditional Belgian White or IPA. A true beer scholar with more than 35 years of brewing experience—and known to many famously as the creator of Blue Moon—Villa holds a Ph.D. in Brewing Science from the University of Brussels and is the author of Brewing With Cannabis: Using THC and CBD in Beer (Brewers Publications, 2021).

Marking the recent upward trend among consumers who prefer healthful, non-intoxicating alternatives to beer, Villa cofounded Ceria as a THC- and CBD-infused beer company in 2017, and launched Ceria’s non-­alcoholic, non-infused beer line in 2020. From 2018–2023, the infused Grainwave Belgian White (5 milligrams of THC) and Indiewave IPA (10 milli­grams of THC and 10 milligrams of CBD) beers could be found in Colorado and then California—two of the largest and earliest legalized cannabis markets.

But it wasn’t smooth sailing. “Entering the cannabis beverage industry was challenging since nobody had commercialized an infused beer before,” says Villa. “Emulsion issues, can liner issues, regulatory issues made it difficult.” Plus, the infused beer could only be sold in dispensaries and not alongside traditional alcoholic beers.

Nevertheless, Villa noticed his brews gain a certain popularity among consumers. “Sales were good,” he says, “but, since Ceria’s products were only sold through dispensaries and marketing of cannabis products is heavily controlled, exposure was limited.”

Ceria stopped producing their infused beers this year. The Denver Post reported in January that no cans were to be located on dispensary shelves in all of Colorado. When asked for comment, Villa’s wife Jodi, a co-owner of Ceria, said the company had not produced infused beers in Colorado since July 2022 because they could not find a local­ licensed packager. With interstate prohibitions on cannabis, their production facilities and supply chain partners in California and Colorado had to be completely separate.

Still, Ceria ultimately ceased production of infused beer in California, as well. “[The] profit margin was comparatively low,” says Villa. “Federal legalization,­ consumer education and a crackdown on the black market is needed to progress the infused beverage market.”

But, Villa feels there is a perfect opportunity for an existing industry to provide the infrastructure recreational cannabis markets need. “Distribution of cannabis beverages should be handled by federally regulated beer/wine/spirits distributors,” he says. “These entities have handled highly regulated products for decades and have the expertise to distribute cannabis, if they choose. They also have the expertise to handle safety recalls, and to report taxes and financials to regulatory agencies.”

Until federal cannabis legalization comes, Villa seems content to continue exploring the non-alcoholic beer sector. The non-alcoholic Grainwave and Indiewave beers continue to live on at Ceria, minus the THC and CBD, and are sold in more than 30 states.

“The non-alcoholic beer category is one of the few bright spots in the beer industry,” says Villa. “It is a small piece of the overall beer sales pie, but one of the few growing segments.”

Thomas Whisenand, Indeed Brewing Company
Minneapolis, MN

Founded in 2011 by CEO Thomas Whisenand­ with friends Rachel Anderson­ and Nathan Berndt, Whisenand­ describes Indeed Brewing Company as “first and foremost a brewery,” known locally for its cult-favorite Pistachio Cream Ale. But he admits they don’t shy away from producing nontraditional beverages.

“On top of the range of beers we make, we have a hard seltzer brand called Real Magic with four flavors,” he says. “Our Yerba Mate Ginger took gold in the Hard Seltzer category of the 2023 MN Brewers Cup Awards. And a Pils Zero, a 0% version of our beloved Pils.”

It was never a question of if Indeed­ would make cannabis infused drinks, but when.

“When THC-infused beverages became legal [in Minnesota] last year we quickly jumped on it,” says Whisenand.­ It also helped that “we had some experience making these kinds of beverages with our now-retired CBD-infused seltzer water, so we had a bit of a headstart with the infusion process.”

Photo courtesy Indeed Brewing Company

Perhaps the most notable difference between Minnesota’s regulations and the other 49 states is that Indeed’s THC-infused beverages, the Two Good Lavender Lemon and the High Fiver Citrus Grass, are produced in the same brewery as the rest of Indeed’s alcoholic beers and seltzers. Unlike Bale Breaker or Ceria, Indeed did not have to separate their cannabis and beer operations, or deal with a limited pool of licensed partners. They simply launched their cannabis beverage line like they would any other,­ sourcing their delta-­9­­ THC and CBD from wholesaler Terpfusion.

Due to industrial hemp regulations passed in summer 2022, Minnesota­ no longer considers hemp-derived delta-9 THC a controlled substance. Any business that holds a food or beverage operating license is free to produce infused­ products without seeking additional­ licensing.

This has led to a massively expanded market for delta-9 infused edibles and beverages to be sold outside dispensaries.

Craft beer is a billion-­dollar industry­ in Minnesota, and breweries were quick to invest in and scale up this new beverage market almost overnight. Thinking back to the launch of Indeed’s first THC beverages, Whisenand says, “our customers were very ready to buy our THC beverages as soon as we were ready to release them.”

While beer, wine and liquor are confined to liquor stores in Minnesota, infused beverages are now sold everywhere that has non-alcoholic beverages:­ groceries, convenience stores, gas stations and even at farmers markets.­ News outlets covering cannabis and beverages have liked Minnesota’s regulations to “The Wild West”, with the only real restriction appearing to be the 21+ age requirement and ID check to purchase.

The lack of regulation, as compared to other states like Washington, Colorado or California, does seem to make a difference, if only to put product in front of more people who are new to cannabis. “A lot of consumer questions came mostly from people who weren’t already partaking in THC,” says Whisenand, “but they were curious about it.”