The use, sale and possession of Cannabis (aka Marijuana, Weed) in the United States is illegal under federal law, but some states in recent years have lifted the prohibition by creating state-level exemptions. As of today, 30 U.S. states have decriminalized marijuana for medical use, whereas patients can be prescribed medicinal products derived from, or infused with medical-grade (FDA approved) cannabis with a doctor’s recommendation.
Colorado, Washington, Oregon, California, Alaska, Nevada, Massachusetts, Maine, Vermont, and Washington DC went further by also decriminalizing marijuana for adult (21+) recreational use. Definitions of what is legal for residents to use, possess, and transport are cloudy from state-to-state and remain difficult to navigate. Mainly because some states haven’t written their laws yet because they get a year from State approval to submit them. One thing that is certain, a recent poll discovered the majority of Americans favor the legalization (64% Pro Marijuana). This figure spikes as high as 84% amongst young people.
In 2016, people of North America spent nearly $54 billion on legal, medical, and illicit marijuana. That’s more money than they spend all year at McDonald’s and Starbucks combined. Over the next decade or so, spending on legal cannabis worldwide is projected at $2.5 billion. Recreational adult-use will cover about 70% of that spend, with medical marijuana trailing at 30%. Chances are, legal cannabis will eventually be available across most of the globe.
The Cannabis plant has a history of medicinal use dating back thousands of years, across countless cultures. Medical marijuana has several potential benefits to health spanning from pain and nausea relief, to aid in appetite and sleep disorder, to relief from anxiety, and poor digestion. The female marijuana plant contains more than 400 chemicals, 113 of these are Cannabinoids, these are the chemical compounds that deliver intoxicants to the neurotransmitters of the brain. The most notable Cannabinoid is Tetrahydrocannabinol (aka THC). The pathophysiology of THC, and these other chemicals throughout the body is complicated biology. Even with modern advances in science and research, there’s still insufficient data to draw any strong conclusions regarding the harm or benefit of cannabis consumption.
So today, marijuana usage remains a highly-controversial topic. Much confusion surrounding this hot-button issue stems from the onslaught of new, highly-potent, marijuana-infused products and their innovative methods of consumption. The issues have been further compounded by synthetic marijuana, an illicit street drug wreaking havoc across the country, where users severely poison themselves with dangerous chemicals, and in some cases, laced with the deadly synthetic opioid Fentanyl.
Although these products contain no actual marijuana, the news headlines of “mass overdoses” and online videos of users having outrageously violent “synthetic marijuana” overdoses has only fueled its dangerous stigma. Another popular marijuana-based product which has also added to the confusion is CBD Oils. CBDs are legal in most U.S. states now. CBD is one of the other 113 Cannabinoids found in marijuana. Unlike THC, CBD is not psychoactive, so it does not change a user’s state of mind.
Some research has concluded that CBDs do appear to produce health benefits and significant positive changes to the mind and body. The recent legalization spawned a “Green Rush” in the form of an endless sea of private, licensed marijuana retail shops known as Dispensaries.
Marijuana is being sold at dispensaries for consumption in a wide variety of creative–new ways. Capsules, candies, powders, tinctures, creams, oral sprays, baked goods, carbonated soft drinks, oils-resins-waxes to vaporize, as well as the traditional dried leaf for smoking.
While the Cannabis industry has quickly evolved over the past decade, the craft beer movement doubled in size right alongside it. With more than 6,400 breweries operating in the U.S. today, it only seems logical that the next step would be a marijuana beer. Marijuana is dominating headlines across all business sectors, including beverage and beer. The media has created a fever pitch of innovators, and investors that want in. And thus, the official race to market for new cannabis products has begun.
The crossover between weed and beer actually started a long time ago. An organic meld between lovers of all things heady. The results of this movement were highly-evident, and succinct within many of the craft beer brand’s marketing, and branding. Hops started being referred to as “strains” with characteristics of “dank”, “juicy”, “piney”, and “fruity”. Weed-inspired beer names like “Heady Topper”, “DUBHE”, “420”, and “Hash Session” were becoming increasingly more the norm. Despite being non-psychotropic, many breweries even fashioned beers around the weed lifestyle. Check out Boulder Beer Company’s “Hazed and Infused”, Oskar Blues Brewery “Pinner”, Red Hook Brewing’s “Joint Effort”, Six Point Craft Ale’s “Resin, or SweetWater Brewing “420” – just to name a few.
This trend progressed with New Belgium releasing “The Hemperor HPA” an IPA actually brewed with Hemp (HPA). Hemp is a non-psychoactive variety of the marijuana plant, and one of the oldest domestic crops in the world. Hemp fiber is derived from the plant and used to produce textiles, paper, clothing and household products. The hemp plant offers one of the most renewable materials in the world, and currently being used across thousands of industries.
The two plants look very similar, confusing politicians who accidentally grouped hemp with cannabis as a controlled substance back in 1970. This is unfortunate because of hemp’s amazing array of uses, one of which is its high concentrations of CBD. Then California-based Lagunitas Brewing, now owned by Heineken, collaborated with AbsoluteXtracts to release “SuperCritical IPA” brewed with THC-free cannabis terpenes used to enhance the beer’s aroma to the likeness of marijuana.
Lagunitas Brewing continued the evolution with a second AbsoluteXtracts collaboration, releasing a refreshing non-alcoholic, cannabis-infused Hoppy Sparkling Water with 0 calories called “Hi-Fi Hops” that contains 5MG of THC and 5MG of CBD. They have subsequently released a 10MG THC with 0MG CBD version in a purple can. The cannabis industry is already well on its way to becoming the next craft beer industry, and the commonalities are vast and easy to recognize.
First off, one of beer’s main ingredients is hops, a plant that’s the genetic cousin of Cannabis, they’re actually in the same botanical family. Hops and cannabis also have similar essential oils. These oils are considered herbal medicines in many parts of the world. Both beer and marijuana users seek a similar sensation or altered state of consciousness affectionately known as the “Buzz”, so the concept of a marijuana beer is not so far-fetched.
Both hops and cannabis affect brain functionality at some level, and both contain terpenes. Terpenes are responsible for the distinct smell of each hop variety or cannabis strain. That citrusy-piney punch is equally familiar to someone who enjoys a Double IPA, to one whom enjoys marijuana. Keith Villa, the brewer who created the infamous Blue Moon for Molson–Coors has now formed Ceria Beverages. Unlike a traditional brewery, Ceria is currently only brewing THC-infused beers.
Cannabis-infused non-alcoholic beer, tea and coffee was just successfully launched from San Diego’s Cannabiniers. To make this all the more cumbersome, it’s illegal in California and most other states, to sell beverages that contain both alcohol and THC. Alcohol and marijuana can’t even be sold in the same store. This is one of the reasons breweries have opted for boozeless THC-infused bevs.
While these are just a few, of the hundreds, soon to be thousands of new beer–cannabis inspired products, it begs the question, is weed on a crash course with alcohol? Some early indicators are pointing to “yes” but consumers of both say, “no way dude”. Some analysts estimate the beer industry could lose north of $2 billion a year if marijuana continues to smoke-up their market share.
States that lifted prohibition on marijuana noticed a 15% dip in overall alcohol sales. Some of the legalized states with a large medical marijuana industry, or “Pot Tourism” industry were affected by up to a 20% decrease. Another study isolated beer from total alcohol consumption, and found that beer unlike spirits and wine, actually had a slight increase in sales.
Two other industries taking deep hits thanks to legal marijuana competing with their own products, is tobacco and big pharma (boo-hoo). Everyone knows that smoking in any form comes with associated health risks. Smoking cigarettes is no longer considered mainstream. Neither is smoking marijuana. Many users have moved from puffing dried herb for the seemingly–healthier alternative of vaporizing cannabis oils (aka Dabbing), and eating weed-infused edibles.
Some of the potential benefits that cannabis-infused drinks could tout over traditional alcoholic beverages is a hangover-free experience, zero or low calorie, a more precise intoxicant unit (meaning the drinker can determine their tolerance level quicker, and more accurately than with alcohol).When you order a beer, you consider characteristics like flavor and aroma, but with a cannabis-infused beer you would also consider desired effects. Do you want a body or mind buzz? Do you want energy and focus, or calmness and sedation? Do you want to get the munchies or stave off hunger? Do you want to get really high, or just take the edge off?
This is possible because there’s two different types of the cannabis plant, Indica and Sativa. Each strain has its own unique range of mind and body altering effects. Sativa is today’s most popular strain because it provides an invigorating, uplifting cerebral effect that pairs well with physical activity, creative projects, and social gatherings. It also increases serotonin levels that regulate your mood, anxiety, and appetite.
Indica on the other hand, is generally for night time use because this strain provides increased mental relaxation, boosts appetite, decreases muscle pain and nausea, and increases dopamine levels that control your brain’s sleep and pleasure zones. Indica strains are more often associated with medical use, because they contain higher levels of CBD and lower THC counts. There’s also Hybrid strains that occur when marijuana breeders select top attributes from sativa and indica strains and crossbreed them together. Hybrids will fall somewhere on the indica–sativa spectrum but can inherit specific desired traits from the parent strains.
The beer market as a whole, continues to shrink, down another 1.2% this year. So, it makes perfect sense that large beer industry players would so quickly diversify their portfolio with cannabis. Please note, while beer as a whole industry shrank, small and independent craft brewers continued to grow by 5%, and today, account for 13% of the total beer market by volume.
The world took notice when Constellation Brands of New York, importer of Corona (and many others) invested $4 billion in Canopy Growth Corp, a Canadian marijuana company. This deal sent smoke signals to the world, that cannabis-infused beverages have arrived, and that beer and marijuana were officially commingled at a large-scale global level.
Canada is set for a country-wide marijuana legalization this year and has sparked the same level of passion for new marijuana-related businesses, and products that we’ve seen here in the States. Molson Coors Canada has announced a joint venture with marijuana company HEXO. They will produce their own line of cannabis-laced beverages for the Canadian market.
While most of these new beers use marijuana oil to provide the buzz, Province Brands of Canada has just brewed a first-of-its-kind beer that utilizes the entire cannabis plant, stalks, stems, and leaf.
To best forecast where this is all headed, is to best understand the next two generations of consumer’s interests and buying habits. It’s no secret that millennials (18–34) helped carve-out the craft brewing industry as they came of age to legally drink, but they’ve slowly been shifting over to craft spirits and wine which has slightly contributed to beer’s shrinking numbers.
A recent Tylt poll of young Americans show staggering widespread support for cannabis, with 84% believing it should be legal. It goes further to show that 87.6% of millennials believe that marijuana is safer than alcohol, and that it’s actually good for your health. It’s a safe bet that millennial’s younger siblings, centennials (17 and under) will follow suit.
Alcohol isn’t going anywhere anytime soon, but it certainly will be under extreme pressure as innovative marijuana-infused products and beverages become a legitimate choice of young consumers.
Jim McCune is director of the Craft Beverage Division of Melville-based EGC Group. Reach him at jimm@egcgroup.com or (516) 935-4944.