Hemp Beer Is Dank, Delicious, and Coming Soon to a Bar Near You

In a lot of ways, hemp and hops seem like they're just meant to go together. After all, they share common ancestors, common flavor profiles, and common recreational uses, says Tom Hembree, the co-founder of the Dad and Dudes Breweria in Aurora, Colorado.

At the end of 2012, the state voted to legalize recreational marijuana. Since shortly after, Dad And Dudes has been out front in the effort to develop and market a beer made with cannabis. The next batch of brew infused with cannabidiol (CBD) oil, a non-psychoactive compound extracted from cannabis, is almost ready to be put in cans. For Hembree, hemp and other cannabis byproducts like CBD are "just another hop essence."

If only it were that simple.

Beers made with hemp have been around for decades: In 1999, while returning from Mexico aboard Air Force One, President Bill Clinton reportedly sampled some Hemp Gold, a cream ale produced by the now-defunct Frederick Brewing Company of Maryland. But despite the explosive growth of America's craft beer scene and the growing acceptance of legal weed, the production and popularity of hemp beers has been limited by a litany of federal and state restrictions, while other laws make it difficult to distribute across state lines.

That's true even in places like Colorado, where craft beer is a booming industry and recreational marijuana is legal. Just down the street from the brewery, you can stroll into a dispensary and find cannabis to be smoked, weed-infused bakery items or candies to be munched, and concentrate to be vaped.

But Dad and Dudes had to get permission from three different federal agencies, along with state authorities, before brewing their George Washington's Secret Stash—so named because the president grew hemp on his farm at Mount Vernon in the days before such production was banned by federal fiat. And when federal rules about using hemp changed abruptly in December 2016, production had to be shut down. "It's been a struggle," says Hembree. Only now, a year and a half later, after a lawsuit and with the beer's legality still somewhat unclear, are they ready to try agin.

The loosening of state-level marijuana laws has spurred entrepreneurs to create new and better ways to take a toke. That spirit of innovation has created new opportunities in the hypercompetitive—some might say overcrowded—world of craft beer. But even as more states get on board with marijuana legalization, breweries that want to experiment with cannabis derivatives like hemp and CBD still face a thicket of vague, sometimes impenetrable state and federal regulations. Even breweries, like Hembree's, that successfully navigate that maze can find their permissions revoked without much warning or explanation. That makes it difficult, if not impossible, for many breweries to invest in this kind of experimentation. In short, hemp and hops can only work together if state and federal regulators get out of the way.

The Power of Terpenes

Understanding how hemp and hops complement one another requires a quick biology lesson.

Start with the plant. Although they are often used interchangeably, the terms cannabis, hemp, and marijuana have important biological and legal distinctions. The former term describes the whole plant; there are several different species, but all come from the Cannabis genus, biologically. Hemp usually refers to the stalks and stems of the plant, which contain CBD oil and are minimally psychoactive. Marijuana is derived from the leaves and flowers (or buds) of the plant, where the higher concentrations of tetrahydrocannabinol (THC) is found. The seeds are a bit of a grey area, with federal law classifying them as hemp (and therefore legal to be imported, but not grown) if they are sterilized, and as marijuana (and therefore completely illegal at the federal level) if not.

There are already THC-containing drinks on the market—mostly fruit-flavored and sweetened drinks, like lemonades made with THC and mock-cocktails like Dixie Brands' Fruit Punch Fizz. Marijuana consumables have expanded in recent years from classics like cookies and brownies to include pot ice cream, cannabis cold brew coffee, and even marijuana mints.

But brewers are generally not interested in making beers that will also get you high. That's partially because mixing alcohol and THC is difficult to do in a predictable way, and partially because there's currently not much of a market for crossfading. But it's mostly because there would be no way to get those products to consumers. There aren't any dispensaries with liquor licenses, nor are liquor stores and bars authorized to sell pot—and it's not clear if there ever will be.

So when brewers reach for cannabis, they are looking for something else: terpenes.

Terpenes are complex hydrocarbon chains found in many types of organic matter, but the ones found in hops are what give beer, especially a hoppy beer like an IPA, its distinctive bitter taste, often with citrus or piney flavors as well. In hemp, similar terpenes give off—as anyone who has smoked marijuana or merely attended an outdoor music festival can attest—a distinct aroma and powerful flavor.

"You get the whole story when you pop the lid on that bad boy and pour it into a glass," says Bryan Simpson, communications director for New Belgium Brewery in Fort Collins, Colorado. He's talking about The Hemporer, New Belgium's hemp-flavored pale ale (an "HPA," as the brewery labels it). And he's not wrong. The smell hits you immediately—and it is dank.

The Hemporer, Simpson tells me, was conceived like so many other great ideas in human history: over a few pints of beer. Researchers from Colorado State University were visiting New Belgium's tasting room and ended up chatting with some brewers. Colorado's culture being what it is, the conversation turned from beer to weed and back again. Eventually, one of the researchers noted the school's work in researching hemp—which cannot be grown commercially, but can be grown for research purposes.

Getting from that conversation to the first bottle of The Hemperor took two years. "As busy as the brewers were, so was the legal team," says Simpson.

Making beer with hemp, it turns out, is mostly illegal because the plant is still considered a Schedule I drug by the federal government—the same rating given to cocaine and heroin—even though hemp contains little to no THC. Working with Colorado State's labs, New Belgium isolation of terpene produced by one strain of hemp, and found a way to mimic it with other hops and florals—including orange peel, grapefruit, and pine. Much of the dankness, then, is a result of legally induced chemical trickery.

"We felt pretty stymied by the regulations, which felt extremely outdated and onerous," he says. "We had to find a workaround."

It's not just federal rules, either. The Hemperor has been banned in Kansas because the state's alcoholic beverage commission was unsatisfied by the brewery's assurances that the beer contains no CBD or THC.

"As busy as the brewers were, so was the legal team."

Now, the beer has become something of a political statement too. New Belgium has partnered with Willie Nelson's GCH Inc. and Vote Hemp to create the American Hemp Campaign as part of the ongoing effort to legalize industrial hemp, something Congress is mulling as part of this year's Farm Bill.

"It's a really cool alchemy of science and nature coming together to make this beautiful thing," says Simpson. "But, obviously, the ideal is to make this the all-natural way with the real plant, so that's what we're after."

Selling CBD Beer Across State Lines

Removing hemp from the DEA's Schedule I list would be a boon for Dad and Dudes Brewery too, but their CBD-infused brew faces a whole slew of other legal issues—even though CBD and alcohol are both fully legal in Colorado and many other states.

"It's 100 percent legal. Actually," Hembree quips, "we say it's 420 percent legal."

But only in Colorado. And only until the federal government changes its mind again.

Dad and Dudes started brewing beers with CBD oil in 2013 and introduced George Washington's Secret Stash in 2016 (they've made other varieties for beer festivals in Colorado, but Secret Stash is the only commercially available one). The plan was to market it in other states where CBD was legal.

Taking the cannabis-infused beer across state lines was possible because the Alcohol and Tobacco Tax and Trade Bureau (TTB), a division within the federal Bureau of Alcohol, Tobacco, and Firearms, had granted the nation's first federal approval for selling cannabis-infused beer to Dad And Dudes in September 2016. Obtaining that permission, Hembree says, required more than a year's work, including letting TTB review the beer's ingredients.

Four months after getting the green light from ATF, the federal Drug Enforcement Agency slammed on the brakes. In December 2016, DEA ruled that hemp derivatives like CBD oil were still considered Schedule I drugs despite legalization in many states. In light of the policy change from DEA, the TTB rescinded its authorization allowing Dad and Dudes to sell across state lines.

"We had plans to put it in cans and to take it nationally in January 2017, but that all fell apart with the DEA's bad call," says Hembree. When TTB asked the brewery to surrender its formula, Hembree refused. They've been locked in a lawsuit ever since. Hembree says both sides are negotiating, but he's confident that CBD will eventually be rescheduled or legalized.

The tipping point may come soon. The Food and Drug Administration recently approved a CBD-based drug for the treatment of seizures, but getting it to patients will require action from the DEA—possibly opening the way for other CBD-infused products like beer.

When I visited the suburban Denver brewery in early July, the new batch of George Washington's Secret Stash was about a week away from being available. For the first time, the brewery was putting it in cans.

"We've had it [on tap] in many restaurants, but this will be our first batch in cans," Hembree told me. I point out that kegs are really just big cans—if it can go into one, why not into the other? There's no good answer. "The state said we couldn't put it into cans until we got federal approval," he says.

That's probably because it's easier to take a can across state lines. Dad and Dudes isn't currently allowed to distribute Secret Stash outside Colorado because every state has different rules and licensing structures for products made with CBD oil (and in some states, CBD remains illegal).

It is legal, however, for people to take the beer out of the state as long as it's not for sale. Coloradans have a proud history of this type of activity. For decades, Coors Original was only available in 11 western states and had to be smuggled east by road-tripping beer lovers.

Getting past federal gatekeepers is only part of the struggle. Down The Road Beer Company in Everett, Massachusetts, was planning to make a CBD-infused beer until it was ordered to stop by the state's Alcoholic Beverage Control Commission.

"The state said we couldn't put it into cans until we got federal approval."

Even though recreational marijuana was set to become legal in Massachusetts on July 1, the commission told the brewery in March of this year, "it will remain unlawful to manufacture and/or sell alcoholic beverages containing any cannabinoid extracts," including THC and CBD, "regardless of whether it is derived from the cannabis plant or industrial hemp." Long Trail Brewing, which announced its first CBD-infused beer earlier this year, has run into similar state-level regulatory issues in Vermont.

The most direct route to legalizing CBD-infused beers would be for the federal government to end prohibition of cannabis, full stop.

But it is likely that legalization will continue in more piecemeal fashion. The removal of hemp, CBD oil, and other cannabis compounds from the DEA's list of Schedule I drugs would be a major step. Such a change would benefit more than just the beer industry, of course. It would open the door to more widespread use of CBD oil (and drugs made from the stuff) to treat a range of medical conditions, and would allow for the commercial growing of hemp, which could be worth hundreds of millions of dollars for American farmers, according to Vote Hemp.

The most immediate action could come, surprisingly, from Congress. At the request of Senate Majority Leader Mitch McConnell (R-Ky.), the farm bill currently making its way through Congress includes a provision to legalize industrial hemp. While that would not settle the crossing-state-lines issue, it would clear the way for brewers to use non-psychoactive parts of the cannabis plant as a flavoring for beer—instead of having to concoct elaborate work-arounds like New Belgium has—and would increase access to hemp for a wide variety of other consumer products.

The Future of Cannabis Brew

Despite the ongoing legal uncertainty, marijuana-infused beer appears poised for a breakthrough. Hemp-flavored beers or brews made with hemp seeds can be found at breweries in Colorado, Utah, California, Oregon, and beyond. Brewers around the country are following Dad And Dudes into the CBD beer market. Even hip-hop duo Run The Jewels, which has partnered with a series of six breweries around the world to produce beers named after some of the group's songs, is planning to release CBD-infused pilsner by German brewery BRLO.

"There's a natural synergy between the two industries, in that there's an emphasis on craft and locality," says Elan Walsky, co-founder of Coalition Brewing, a Portland, Oregon, brewery that's been making hemp- and CBD-infused beers since 2016.

The next step up from beers made with hemp and CBD oil would be a "beer" made with THC. That's something Keith Villa, the man who originally created Blue Moon beer, now aims to create. In March, he announced plans for a line of THC beers that would skirt some of the legal obstacles to mixing of THC and beer by being nonalcoholic. Though there are few details about the products for now, Villa told Fortune he hopes to have the line available in Colorado this fall.

If so, those brews will join a small but growing number of THC-laced drinks—think "drinkables" instead of edibles—already on the market. California-based Lagunitas Brewery is launching a brand of THC Sparkling Water, Hi-Fi Hops, to be sold in California dispensaries starting on July 30.

Some observers remain skeptical that drinkable forms of THC will be a hit. Despite all the excitement over some high profile new products, drinks comprise only about 7 percent of the edibles market in Colorado, and edibles account for only about 15 percent of the state's overall marijuana market, says Joe Hodas, COO for General Cannabis, a publically traded holding company for a variety of marijuana-based businesses ranging from growers to retailers.

Legal marijuana is still very much in its infancy, however, much like the the craft beer market was in the not so distant past. Variety and innovation have been the keys. The current popularity of sour beers would have been hard to predict less than 10 years ago when hop-heavy IPAs were all the rage, and completely unfathomable in the mid-90s when craft breweries started making inroads in a market dominated by watery yellow macrobrews. Looser regulations have allowed high-quality beer in a multitude of styles to flourish.

Marijuana brews might never become widely popular, or they might be the next big thing—after all, is a beer made with CBD really any weirder than a salty and sour gose brewed with cucumber and melon?

From the other side, most stoners might prefer to puff away on a vape pen even as drinkables become more readily available. But the cannabis crowd, with its enthusiasm for odd edibles and DIY bongs, has always appreciated innovation and creativity.

If laws regarding hemp and non-psychoactive cannabis compounds like CBD are changed, breweries could be freer to experiment with hemp as a way of standing out from the crowd. The nascent, but fast-growing, marijuana industry could benefit too, by finding greater exposure and new customers willing to try weed that's infused into an already widely beloved mood-altering substance.

"I think you're going to see a lot of innovation in this space, in terms of what kinds of drinks and orals are developed," says Lance Anderson, a Texas-based attorney who works on marijuana branding and intellectual property. "We are about to witness a true renaissance of the industry, and I look forward to it."