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Sunday, 27 May 2018 08:33

Craft brewers walk regulatory tightrope with cannabis-related products

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New Belgium Brewing Co. recently secured federal approval to make The Hemperor, a pale ale brewed with hemp. New Belgium Brewing Co. recently secured federal approval to make The Hemperor, a pale ale brewed with hemp. COURTESY PHOTO

On the label of a recently released pale ale, New Belgium Brewing Co. proclaims “Hops and hemp reign — together at last.”

The Fort Collins, Colo.-based craft brewery bills the beer, dubbed “The Hemperor, as “a new kind of hoppy beer blending hemp with hops for complete sensory domination.”

Although New Belgium is based in a state with legalized recreational marijuana, the company went through a series of federal approvals before making and selling the beer, which is now available across the country, including in Michigan. Its development was reportedly three years in the making.

Beneath this broader trend of craft breweries infusing cannabis-related products like hemp and oils into beer, some brewers are learning of complicated regulations as they go.

Several Michigan brewers have experimented with hemp-infused beers, but the trend is yet to truly take off here compared to states like California and Colorado, observers say. That could all change in six months if Michigan voters legalize recreational marijuana and industrial hemp.

“Hemp and hops are closely related so we are bound to see more independent brewers experiment and innovate in this space,” said Julia Herz, craft beer program director for the Boulder, Colo.-based Brewers Association.

Across the U.S., breweries increasingly are pairing cannabis with craft beer, both in product and marketing. (Breweries last month particularly capitalized on the April 20 “4/20” holiday to promote events.) In particular, many are brewing beers with the non-psychoactive components of cannabis plants, such as hemp seeds or oil terpenes that can be extracted for flavor or smell.

While alcohol isn’t being combined with the high-inducing THC in marijuana, federal and state regulations around hemp and other byproducts like cannabidiol (CBD) mean brewers can’t simply add them to beer, even in states where those products are legal. For example, brewers need formula approval from the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) if they make a beer with hemp products.

“If you’re adding non-traditional ingredients, you are required to get (TTB) approval before starting production,” said Alva Mather, an attorney and partner at DLA Piper in Philadelphia who spoke on the topic at the Craft Brewers Conference in Nashville this month. “If you’re looking to put cannabis-related extracts in beer, you have to be very careful of where it’s coming from.”

Overall, Mather said, “There is a lot of misinformation about what is and what is not allowed.”

LAWMAKERS TAKE ACTION

On May 17, the Michigan Senate unanimously passed a bill that would make it a misdemeanor to offer, possess, sell or offer to sell a “marihuana-infused beer, wine, mixed wine drink, mixed spirit drink, or spirits.” Bill sponsor Sen. Rick Jones, R-Grand Ledge, calls it a preemptive measure to keep THC — the component of cannabis that gets users high — out of alcohol.

Advocates have called the bill unnecessary since there wouldn’t be an avenue to sell such a product at bars or dispensaries if the ballot initiative passes. The way it is written, Jones’ bill also would prevent certain marijuana extracts — even the non-psychoactive kinds — from being added into beer.

Jones said that is not the bill’s intent, and he is targeting potential products with THC in them.

“If someone is marketing something that says it has marijuana flavor, that would not be included (in the bill),” Jones said. “Which is kind of silly: I can’t imagine anyone would like to have the flavor, but if that’s what they’re marketing that would be fine.”

It appears hemp products still would be allowed at the state level if the beer received TTB approval.

“I have absolutely no problem whatsoever with growing industrial hemp for making clothing, rope or whatever products could be made with it,” Jones said.

Jones’ bill may still add confusion, said Travis Copenhaver, an attorney with Royal Oak-based Cannabis Legal Group.

“It’s going to come down to what is ‘marijuana’ and what is ‘hemp,’” he said. “Those are two different things.”

Copenhaver said the bill also raises questions about the Legislature’s priorities in creating cannabis prohibitions despite permissive medical and recreational laws. He points to the law’s affecting “a person,” and not specifically a company or dispensary.

“They’re saying I can legally make beer, I can legally make cannabis, but the moment I put the two together it’s a misdemeanor (and that) seems a little silly to me,” he said.

FEDERAL ENFORCEMENT

Mather said up until this point, the federal government has generally sent cease-and-desist letters to brewers and has not taken an aggressive approach to companies that bend the rules around marijuana and hemp. However, the “next wave” for those who continue to violate the rules could include “major fines,” she said.

“Their perspective now is getting the word out,” Mather said. “I think they may believe, accurately, that there’s confusion as opposed to folks willfully trying to fly in the face of regulations.”

Seth Rivard, co-owner of Rockford Brewing Co. north of Grand Rapids, has been making Fuzzy Nuggs hemp pale ale for the past five years, released each year on April 20th. The beer is made with hemp hearts, or seeds, which are readily available at stores.

“It’s a big hit. It’s tasty. It’s fun,” Rivard said in an email to MiBiz.

But when he also says “it’s legal” and that he didn’t need TTB approval, Mather disagrees.

Rivard contends the hemp hearts are included with types of fruits, vegetables, seeds and herbs that are exempt ingredients that meet pre-approval from the TTB. Mather said this is incorrect and a common misperception among brewers.

“I can understand why a brewer might think that’s true, but it’s not legally accurate,” Mather said.

Rivard responded: “Good to know.”

As federal authorities and breweries sort through the confusion of a cannabis-craft beer emerging market, Mather says there will likely be less room for error.

“As we move from an honest mistake to the potential for people to really be trying to get away with something, we may see more significant enforcement responses from the TTB,” Mather said.

Read 2238 times Last modified on Sunday, 27 May 2018 21:10

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