Beer Brewers Branching Out

Beer Brewers Branching Out

Recent changes to cannabis laws have encouraged brewers to branch out into using cannabis-based beverage additives. Is cannabis beer the future of the beer industry?

Rewriting Regulations

The 2018 Farm Bill – effective January 2019 – defined hemp as cannabis or a cannabis derivative containing less than 0.3% of tetrahydrocannabinol (THC), cannabis’ psychoactive compound, and delisted hemp from the Controlled Substances Act (CSA). Therefore, hemp – a primary source of nonpsychoactive cannabidiol (CBD) – is now legal under federal law for cultivation, possession, use, and sale. However, food and beverage products containing CBD require FDA approval to be generally recognized as safe (GRAS) for consumption if they are to be traded in interstate commerce. As of November 2019, no such products have been certified as GRAS.

Under Consideration

Nevertheless, many brewers have already jumped on the bandwagon, producing beverages infused with both federally illegal THC and federally legal CBD. For the time being, beers containing CBD or THC – such as Coalition Brewing’s CBD-infused Two Flowers IPA alcoholic beer or Ceria’s Grainwave THC-infused, non-alcoholic beer – are relegated to sale in the state in which they are produced. However, there are multiple measures under consideration at the federal level that would enable such products to be introduced to the US market:

  • a House bill that would regulate cannabis in a manner similar to alcohol
  • a Senate bill that would deschedule marijuana from the CSA, create a commercial permit program, and establish an excise tax for legal sales

Despite CBD not yet being GRAS, it is federally legal in most localities, presenting an immediate opportunity for investment. Should these bills pass, the interstate market for cannabis-infused beverages – including cannabis beers featuring psychoactive THC – will be much more accessible for brewers of all sizes. In the meantime, national participants will have to keep a close eye on local successes and failures with cannabis-infused beers while they wait their turn to join the market.

Want to Learn More About Beer Trends?

Don’t worry, we have you covered! For additional information and analysis of US industry trends, see Beer: United States, a report published by the Freedonia Focus Reports division of The Freedonia Group. This report forecasts to 2023 US beer demand, production, and removals in gallons. Total demand is segmented by packaging type in terms of:

  • metal cans
  • glass bottles
  • draft
  • other packaging types such as aluminum bottles, plastic bottles, and refill glass bottles

To illustrate historical trends, total demand, production, removals, and the various segments are provided in annual series from 2008 to 2018.

Removals encompass all beer removed from breweries for sale or consumption (including exports), as well as beer sold and consumed on brewery premises. Non-alcoholic beer and non-beer malt-based beverages – “malternatives” such as coolers, hard cider, and hard lemonade – are regarded as beer for the purposes of this report, as they share much in common with traditional beer production. Re-exports of beer are excluded from demand and trade figures.

You can also check out some of our related reports, which include:

About the Author

Chris Dyer is a Market Research Analyst for Freedonia Focus Reports. He holds a Master of Arts in Security Studies, and his experience as an analyst covers multiple industries.