In Minnesota, the Hemp-Beverage Bellwether Tolls for Beer. Sort Of.

There’s an episode of “Seinfeld” I think about a lot. Well, there are a lot of episodes of “Seinfeld” I think about a lot, actually. I’m a 37-year-old white guy, after all. But one of the subplots in this particular episode of “Seinfeld” — Season 5, Episode 22, “The Opposite,” for the real heads reading this — turns on the realization that the show’s cosmic scales are balanced on its titular lead, with the rest of the characters’ fortunes rising and falling in direct inversion to one another.

“Elaine, don’t get too down,” says Jerry. “Everything will even out. See? I have two friends. You were up; [George] was down. Now he’s up, and you’re down. Do you see how it all evens out for me?”

I find this to be a useful framework for thinking about the beer industry’s total-beverage troubles these days. As beer declines, other products are picking up some of the volume it sheds. It all evens out for the man in the middle — in this case, John Q. Guzzler and the American drinking public he represents. People want good things to drink! They just don’t always want beer: These days, they’re far more omnibibulous, as Brewers Association president Bart Watson is fond of saying. We talk about this all the time. But as one category sinks, it clears space for others to rise. In the broader American beverage business, one of the fastest-rising Costanzas to beer’s beleaguered Benes is the pseudo-category of drinks infused with hemp-derived tetrahydrocannabinol (THC.)

How this nascent, booming trade is affecting demand for “beer-flavored beer” is hard to say, on account of the aforementioned nascence. There ain’t many reliable benchmarks in this Wild West: The Hemp Beverage Alliance just inked a data deal with Vermont Information Processors earlier this month, and apples-to-apples comparisons across state lines are hard to come by. So it’s tricky trying to back into a straight answer. But in the upper Midwest hangs Minnesota, the biggest bellwether for gauging how THC beverages will play alongside beer proper. Whether its peals hit your ear invigorating or alarming depends on where you sit on the drink industry’s cosmic scales. Either way, it is ringing.

Earlier this month, Beer Marketer’s Insights’ Craft Brew News vertical (BMI’s CBN) published sales data from the Land of 10,000 Lakes that showed beer volumes down 6.3 percent year-over-year through June 2025, and craft beer volumes down around 9 percent by the same metric. “Lots of factors go into MN’s softer beer mkt, but CBN continues to watch closely in one of the most developed mkts for hemp-based THC beverages,” wrote the trade outlet in its hallmark un-bylined jargon. The implication, for those of you who don’t read BMI-ese, is that hemp-based beverage volumes could be rising in Minnesota because beer volumes are falling in the state, which first legalized the former in 2022. This is the agita animating many a-harrumph from beer distributors and brewers across the country, who are no doubt watching the Minnesotan market just as closely to find out whether THC seltzer will be more friend or foe to GOALs (Good Ol’ Ales and Lagers) (sorry) in the long term. But it’s not so simple, says Bob Galligan, the Director of Government & Industry Relations for the Minnesota Craft Brewers Guild.

“Not at all,” he tells Hop Take in a recent phone interview, responding to the premise that THC beverages are taking from beer in the longtime stronghold for the latter product. “If we weren’t offering [customers] these hemp beverages, I don’t know that we would see beer numbers skyrocket. … More than anything, it’s actually bringing more people into our [members’ taprooms], and more people are buying fluid.” For the craft brewing industry’s lead lobbyist, this mostly nets out. As journalist Jerard Fagerberg reported for Vice back in September 2022, two months after the legislature opened the THC loophole, “Minnesota’s craft breweries were some of the first to act” on the opportunity because they already had all the equipment and infrastructure in place to get a minimum viable product to market. “It’s like a gold rush,” Jason Sandquist, co-founder of Wild Mind Ales, told Fagerberg at the time.

And lo, have they rushed: A 2023 guild survey indicated that 89 percent of the membership was either already involved in, or considering, the hemp-beverage trade. Two years later, some 60 to 70 percent of them are serious enough about it to apply for soon-to-be-required licenses with the state’s Office of Cannabis Management, per Galligan’s back-of-the-napkin math. “There were a fair amount of [breweries] in the suburbs and more rural areas that felt there would be pushback from their community, but it turns out there’s a whole bunch of folks and farmers who also like to consume THC,” he says. “There’s been less ‘Reefer Madness’ mentality than some people were anticipating.”

Every brewery is different, and Galligan emphasizes that a solid quarter of the guild’s membership is sticking to beer. (“If people wanted to jump in, they would have at this point,” he says.) But there’s no doubt that THC drinks are where the money is in Minnesota. Isaac Showaki, the president of Wisconsin’s Untitled Art Brewery and the founder of Octopi Brewing in Waunakee, Wis., which was acquired by Asahi in 2024, introduced a cannabidiol seltzer, Goodwell, half a decade ago, and a Delta-9-infused line, Mystic Orbit, in 2024, taking advantage of his close proximity to the Minnesota market. “Six years ago, beer was 94 percent of my portfolio,” he tells Hop Take. “Now, hemp [beverages are] around 12 percent of my portfolio, and beer is single digits, like 3 or 4 percent.” Untitled Art’s overall output has grown in that time, with its hard seltzer brand, Florida Seltzer, and non-alcoholic beer, FLVR!, both finding success. Showaki projects the firm will do 27,000 barrels in 2025, an 18 percent gain from last year. But virtually none of it will come from beer as such.

As the co-founder of Wild State Cider in Duluth, Adam Ruhland didn’t have any beer volume in his portfolio to begin with. And his experience since launching Birdie, a line of Delta-9-infused THC drinks, in mid-2023 hasn’t been nearly as dramatic a seesaw effect as Showaki’s. “We’re probably flat on the package side in [Minnesota] this year, and we’re up slightly on draft, which all things considered, I think is pretty good,” he says. Birdie, by contrast, will grow “triple digits” again this year. Sure, that’s a deceleration from the roughly 600 percent growth on a much smaller base that Birdie posted last year, but Ruhland is at peace with it. “It’s hard to just keep doubling forever,” he says, laughing. The brand is now available in approximately 20 states, with a mix of direct-to-consumer and distributed business. (Distributors will be pleased to hear that Ruhland, like most folks I’ve spoken with in the hemp-beverage industry, sees the middle tier as a much more load-bearing route to market for THC beverages than e-commerce; they’ll be less pleased to hear that most states’ regulations offer no franchise protections for the products.) “We have a healthy cider business, and if that was our only thing that we were entirely focused on, we’d probably be selling more cider than we are right now,” says Wild State’s co-founder. “But if you just look at the opportunity right now, ‘put more money into this machine’ is the answer.”

The machine is humming. In April, the state auditor announced that Minnesota’s public liquor store network posted record sales of $437 million in 2024, the first year that THC beverages and gummies were available for broad retail sale in the state. “Let me tell you, the horse is out of the barn,” says Paul Kaspszak, executive director of the Minnesota Municipal Beverage Association. “It’s running down the road.”

With so many craft brewers involved in the trade, and beer distributors warming up to the idea (and the money), the THC segment/category hasn’t yet run roughshod over Minnesota’s beer market. But let’s see what happens as it scales.

🤯 Hop-ocalypse Now

I try not to wax poetic about the “good old days” of the American beer business, because a) they weren’t good for everybody, and b) I was barely alive for any of them, and certainly not drinking anything stronger than 2 percent milk. The country’s great brewing dynasties had many, many ills, but there’s something indelibly romantic about the idea of an industry run by scions to whom the trade was an exceptional birthright rather than just another consumer-packaged-goods category, right? (To say nothing of a brewing industry run by brewers — one of the most enduring points of attraction for the craft brewing segment.) Rahul Goyal, the executive Molson Coors (MC) named earlier this week as the replacement for soon-to-retire CEO Gavin Hattersley, isn’t some interloper from toothpaste, coffee, or salty snacks: According to his LinkedIn, he’s been with the company for a quarter century. But it’s a sign of these shareholder-value-driven “total beverage” times that MC’s official blog highlighted not his beer-selling prowess but rather “subject-matter expertise in strategy, long-range planning, M&A, finance and technology.” Romantic, it ain’t.

📈 Ups…

Torch & Crown Brewing and Aslin Beer Co. have formed a new Acela corridor-spanning craft brewing group, the Driven Collective… Michelob Ultra is now firmly seated atop Bud Light’s old throne as the best-selling beer in the country in both the on- and off-premise… Fireball’s malt-based knock-off (of itself) may actually have to face a class-action lawsuit, with a federal judge in New York ruling this week that the plaintiffs’ case could advance…

📉 …and downs

Anheuser-Busch InBev fired a Wicked Weed brewer for posts on his personal social media about slain right-wing pundit Charlie Kirk… After shuttering three locations last week, Iron Hill Brewery abruptly closed all 16 of its remaining brewpubs, hanging an unknown number of workers in five states out to dry…

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