Beyond Beer: advice on diversifying and breaking into cannabis beverage

With overall US beer sales down 3% and the “legalization” of hemp-derived THC, many brewers have found opportunity in the changing market by branching into cannabis beverage. We sat down with Ben Smith, Head Brewer at Surly Brewing Co. in Minnesota to discuss the brand's foray into the cannabis beverage space. 

What first interested you in cannabis beverage? When did you feel there was a necessity to diversify your business? What were the signs?

In 2022 the MN legislature legalized hemp-derived, low-potency THC edibles and beverages — without any restrictions on producing alongside alcoholic beverages.  To be honest, this took most of us by surprise and as a craft brewer I never anticipated being able to produce and package any sort of THC products. But once the door was opened we saw a huge opportunity to produce THC beverages and meet the emerging consumer demand at scale. As a craft brewery we already have the infrastructure, equipment, and quality assurance programs in place to make high quality, consumer-safe products.  

What kind of opportunities has cannabis beverage opened up for you? Any surprises?

From a technical perspective, it’s really allowed us to innovate and develop processes that have opened doors to other beyond beer beverages. We’ve started working with some other partners on co-pack opportunities — which is something we haven’t done much of in the past — and that’s been a challenge but ultimately extremely rewarding and a boost for business. I feel like we’re also reaching a different demographic than our typical Surly drinker, which is great for brand awareness and business growth potential.

What kind of changes did you have to make to your existing manufacturing facilities? 

We’ve been diligently upgrading our equipment and tweaking standard processes to meet the challenges of producing cannabis beverages. We worked hard with our suppliers to first make sure our emulsion and production process would be compatible with our can liners – this is critical to the shelf stability of the product. We developed systems to produce de-aerated water and safely dose flavor and emulsion in a consistent, repeatable way. We’re installing new packaging equipment to allow us to package in a variety of formats, including pak-techs, various carton configuration and allowing for still, carbonated or nitrogenated beverages. We’ve adopted stringent quality assurance practices to make sure we’re compliant with NA beverage production, including getting an NA license and building a relationship with a third-party lab to validate our entire process through the shelf-life of our products.  

Do you have any advice for other brewers looking to enter the space?

Take quality seriously – test every batch not just for potency but for mycotoxins, solvents, pesticides and microbial contaminants. Audit your suppliers and make sure they are doing the same. Don’t put out products into the market if they don’t meet any of these qualifications.  

Tell us about your biggest successes and what you’re excited about in the latter half of this year.

I’m extremely excited to continue to innovate with different flavor combinations and different cannabinoid products. We’re experimenting with CBG, CBN, THC-V in addition to THC. Also, we now have the ability to create still and nitrogenated beverages in addition to traditional carbonated beverages which gives us a lot of room to play around. As Marijuana has now also been legalized in Minnesota, I’m extremely curious to see how our low-dose hemp-derived THC products do alongside traditional marijuana-derived THC products. Luckily, our products can be sold in liquor, grocery and convenience stores, whereas marijuana products will only be sold in dispensaries. 

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