Two prominent players in Michigan’s cannabis and craft brewing industries have launched a new product merging their areas of expertise: beer-flavored edibles.
In late April, Short’s Brewing Co. and Green Peak Innovations were finalizing the delivery of “Short’s x Jolly” gummies to Green Peak’s Skymint dispensaries around the state.
The partnership — which originally also included plans for vape pens and non-alcoholic cannabis-infused beverages — signals the growing fusion but also legal and regulatory uncertainty between the two industries.
“One of the reasons we sought out Short’s is they are super creative and not afraid to push the envelope,” said Joe Neller, Green Peak’s chief government affairs officer.
Around early 2017, Green Peak first contacted Short’s about a potential partnership, Neller said. Green Peak is a major vertically integrated cannabis firm, with large growing and processing facilities in Lansing and recreational and medical retail stores around the state, including in Nunica, Newaygo and White Cloud.
Last year, the companies announced initial plans for products, yet edibles were most feasible to produce due to health concerns around vaping and regulatory challenges with infused non-alcoholic beverages, the companies say.
The edible gummies borrow flavors from Short’s flagship beers Soft Parade and Huma Lupa Licious. A third product is based on Mosa, a mimosa-like beverage from Short’s Starcut Ciders brand.
Short’s — which is headquartered in Elk Rapids and runs a brewpub in Bellaire — sends wort (the liquid before fermentation) to Green Peak facilities near Lansing. Neller said Green Peak has a chef on staff who worked on different formulations to “mimic the flavor” of Short’s beers.
“The sweet, sugary liquid [wort] is perfect for gummies,” said Tony Hansen, chief innovation officer at Short’s.
Short’s also is developing flavors that could potentially be used for infused non-alcoholic beverages, “dry flavors” that would be used in powder form and cannabis flower strains that pair with their beers.
“We have a lot of irons in the fire,” Hansen said.
The 10-milligram THC edibles — which cost $25 to $30 for a 10-pack and are available for medical and recreational use — were set to come to market the week of April 20. They will be sold through Skymint stores, but Neller hopes to wholesale them to other cannabis retail outlets.
Before even making products, the companies had to navigate legal questions ahead of the partnership. Short’s and Green Peak have a licensing agreement that doesn’t involve the exchange of money so that Short’s, a federal- and state-licensed brewery, avoids profiting from the sale of a cannabis product, company officials say. All of the processing takes place at Green Peak’s facility.
Instead, the arrangement is about market position. It also aligns with efforts by Lagunitas Brewing Co., which has a 20-percent equity stake in Short’s and sells a “Hi-Fi Hops” sparkling water infused with CBD and THC.
“From a business point of view, there’s a lot of data coming out of other countries and states that would indicate substitution from alcohol to marijuana potential,” said Short’s CEO Scott Newman-Bale. “Obviously there’s myriad legal restrictions and constraints, but we want to make sure that if that’s where the market goes — whether it’s in a year or 20 years — that we’re actively aware of it.”
Varnum LLP attorney Chris Baker said overall there are “not a lot of efforts being made at least by alcohol manufacturers to include cannabis or even hemp in their products.”
But he said introducing an alcohol product to cannabis is not unlike other food or beverage products. Under state law, a beer manufacturer couldn’t sell product directly to a third-party food manufacturer.
“That manufacturer, whether it’s cannabis or otherwise, would have to buy the product in the same way any other retailer would,” Baker said.
For now, Short’s and Green Peak are just focused on edibles. Hansen said the companies hit a “little bit of a stop” with infused beverages because of state testing procedures for edibles that limits moisture and water content. But he says “beverages are definitely the future of cannabis consumption.”
Hansen and others have noted increased demand in more discreet cannabis products. Testing a variety of those offerings now may benefit the brewery in the longer term.
“For me, it’s all about developing new products and new exciting opportunities to take a lot of our creative process and focus it in a new arena,” Hansen said, adding that the brewery has long experimented with beer, cider, hard seltzer, wine, mead and food. “This was another avenue to play in.”
