Have You Ever Seen a Craft Brewery… on WEED?!

There aren’t many quintessential beer movies out there, but stoner flicks have a canon that spans generations, from “Cheech & Chong’s Up in Smoke” and “How High” to “Pineapple Express.” Your humble Hop Take columnist came of (teen) age roughly in the era “Half Baked,” a 1998 joint (ahem) written by Dave Chappelle and Neal Brennan that introduced the world to the concept of an “enhancement smoker” — someone who “thinks that marijuana makes every activity that much better.” To illustrate the point, the character, played by a pre-“Daily Show” Jon Stewart, chats up his dealer with increasingly galaxy-brained examples of the mind-expanding powers of his favorite flower. Sure, you’ve seen the back of a $20 bill. But: “Did you ever see the back of a $20 bill… on WEED?!”

The line has been running through my head a lot lately, and it cropped up again earlier this week, when Tilray, a publicly traded cannabis firm with operations on four continents, acquired Montauk Brewing Company for an undisclosed sum. In my head, I could hear a craft-brewing version of Stewart’s nasally stoner refrain: “Yeah, you’ve seen a diversified mid-major craft brewing portfolio. But have you ever seen one… on WEED?!”

Tilray’s latest push into the American booze business signals how keen it is to manifest that trippy vision. The New York brewery joins SweetWater Brewing Company, Breckenridge Distillery, Green Flash Brewing Company, and Alpine Beer Company in said portfolio, adding over 45,000 barrels to its new parent company’s already considerable beverage-making capacity. Also in the deal: 6,400 established on- and off-premise accounts already carrying Montauk’s beer that Tilray hopes to turn into conduits for cannabis in the near-ish future. “This distribution network is part of Tilray’s strategy to leverage our growing portfolio of U.S. CPG brands and ultimately to launch THC-based product adjacencies upon federal legalization in the U.S.,” the company’s chairman and chief executive, Irwin D. Simon, said in a press release announcing the Montauk purchase.

This is the sort of talk that sends chills down certain spines in the brewing business. In recent years, industry insiders have fretted about whether widespread cannabis legalization was looming just beyond the United States’ legislative horizon and about to spark a new front in the never-ending competition to satisfy the American appetite for vice. It was, and mostly remains, a concern that available data ought to snuff out.

“I’m not convinced that anyone has clearly demonstrated what the causal mechanism would be for marijuana legalization decreasing beer sales,” wrote Bart Watson, the chief economist of the Brewers Association, in 2018. A 2021 study comparing Nielsen scan data from markets with legalized weed and those without, published in the Journal of Cannabis Research, echoed that assessment. “Results suggest that alcohol and cannabis are not clearly substitutes nor complements to one-another,” its co-authors concluded.

Indeed, despite the aforementioned adjacency aspirations, Tilray’s Montauk deal is “first and foremost” about “the beverage industry today,” Simon told Beer Business Daily. (The trade publication found the executive less “unrestrainably jubilant about the potential to cannabinize their [Tilray’s] bev alc brands” than he had been in previous confabs, for whatever that’s worth.)

Part of the reason for Tilray’s sober take on the national THC landscape is the fact that federal legalization remains a pipe dream for now. (It’s got a better shot then, say, opium, the narcotic about which the phrase “pipe dream” was coined, but it’s hardly a sure shot given, y’know… *gestures vaguely at the U.S. Senate.*) Just 19 states and the District of Columbia currently allow for some form of recreational cannabis use.

Still, state-level legalization is slowly but surely rolling across the land: five states had weed-related regulatory questions on their 2022 ballots, and Maryland and Missouri voted on Tuesday to legalize the drug. Spirits, not marijuana, have been the closest alligator to the American brewing industry’s leaky boat, and they still are. But you’d have to be high to miss the trendline, and savvy beverage firms are positioning themselves for whatever weed reforms this way come. “Cannabis legalization in America seems like it has some level of inevitability,” Paul Weaver, Boston Beer Company’s head of cannabis, recently told the trade publication SevenFifty Daily. “So then it was a question of, ‘What’s the right way to enter that space?’”

Or, in the words of the “enhancement smoker”: If you were to see a craft brewery on weed… what would it look like?

Maybe it will look something like Boston Beer Company, which has supplanted Samuel Adams’ sagging sales and relevance with a barrage of beer-ish beverages like Twisted Tea, Angry Orchard, and Truly. The firm operates a cannabis brand in Canada called TeaPot (do you get it?!) and has tasked Weaver with exploring ways to leverage its existing booze brands and develop new ones for potentially legalized stateside markets in the future. If you squint at it through that admittedly hazy crystal ball, Tilray’s portfolio doesn’t look so different from Boston Beer Company’s. The fact that the former is being built explicitly with federal legalization in mind could pay greater dividends down the road, if it ever comes to pass. (In hiring a three-decade industry vet who briefly served as the president of Flying Embers to run its beer business, Tilray has signaled it may be willing to explore beyond beer as it plays the waiting game on the cannabis front. Intriguing!)

Or maybe the intersection of craft brewing and cannabis will be created in a macrobrewer’s image: Lagunitas Brewing Company, wholly owned by Heineken, has been working the segment since California legalized cannabis half a dozen years back. Its Hi-Fi Sessions brand is available in dosages from two to 10 milligrams. Judging by its sleek branding and slim 12-ounce can, its ideal customer seems more like Jon Stewart now than his “enhancement smoker” of a quarter-century ago. After all, If macrobrewers are intent on anything, it’s growing with their customer. Maybe infusing their acquired craft brands with cannabis helps them pull that off.

Of course, there are over 9,000 craft breweries in the country, and not one of them has the resources of the bigger companies listed above. Still, I don’t think that they’re predestined for reefer sadness in the event of broader legalization. There’s a version of beer’s weed-infused future that includes small, independent craft breweries, dear reader, and I’ve seen it with my own eyes. (They weren’t even bloodshot at the time.)

On a recent visit to Minnesota, where the state legislature maybe-accidentally approved the sale of products containing full-strength Delta 9 THC, I spent time in Twin Cities taprooms where non-alcoholic weed seltzers are sold alongside ordinary alcoholic beers. The commingling of booze and bud service is considered reckless by some cannabis legalization advocates, who worry that it will give hard-nosed regulators and puritanical lawmakers a potent pretense to kibosh weed’s mainstream acceptance as a legitimate, safe recreational vice. (Doubly so the actual combination of the two substances into some sort of alcoholic weed beverage, which is a major no-no for the same reasons, plus physiological ones, too.) But in my admittedly limited experience, the scene was downright pleasant, and customers appeared to appreciate that the available breadth of craft drinks transcended alcohol — and enabled them to transcend consciousness without a hangover waiting for them on the other side.

Is that sort of substance-abetted liberty of leisure coming soon to a state near you? Hop Take can’t say, because the future of the cannabis-craft beer connection remains hinged on the unpredictable, uneven, and often unreasonable matters of the substance’s legislative, regulatory, and cultural treatment. But considering Tilray’s Montauk buy-up, and other recent and methodical moves from major beer-making players, whatever form it takes will be anything but half-baked.

🤯 Hop-ocalypse Now

Buying up sponsorships with emerging professional sports leagues used to be a staple of Anheuser-Busch’s powerful marketing strategy since long before 2008, when InBev arrived in St. Louis with a bunch of Brazilian cash for shareholders and a carving knife for the balance sheet. The firm focused its spending on craft breweries (Goose Island, et al.) and baffling tech acquisitions (RateBeer.com, et al.) in the intervening decade. But maybe we’re witnessing a Big Red return to The Ocho-style obscure athletics: Just this year, ABI released its once-iron grip on Super Bowl airtime (and NFL alcohol exclusivity in general), and bought a Major League Pickleball team for a rumored seven-figure sum.

📈 Ups…

Dr Pepper Keurig makes its first big beer move with a $50 million investment in Athletic Brewing Company… Bang Energy will remove “super creatine” from its marketing after losing false-advertising lawsuits… That lawsuit between Anheuser-Busch InBev and Constellation Brands over the definition of “beer” is still going, and still funny…

📉 …and downs

Ball Corp. predicts “less consumption” across the U.S. as inflation sets in… Hard Mtn. Dew slammed for kid-friendly displays that may have been faked by disgruntled rivals… The guy who pegged Senator Ted Cruz with a White Claw at the Houston Astros’ victory parade got arrested…