Michigan’s Recreational Marijuana Law Should Take Effect Next Month

In early November, Sipp Industries launched its Major Hemp H-IPA, a hemp-based India Pale Ale, in partnership with Church Street Brewing Co. in Itasca, Ill. After earning label approval from the Illinois Alcohol and Tobacco Tax and Trade Bureau (TTB), Major Hemp H-IPA will now be canned and distributed regionally—and sold at Church Street Brewing Co.

The partnership with a brewer on the ground in a particular state yielded a certain ease of process for Major Hemp, a wholly-owned subsidiary of Sipp Industries. In the past, the company has worked with a contract brewer that strictly brews third-party beer products.

According to Major Hemp President Ted Jorgensen, this makes it somewhat more challenging in a state like Colorado, where Sipp and Major Hemp essentially had to find their own way through the wholesale licensing and state regulatory process. (When CBT spoke with Jorgensen in early November, Major Hemp was in the “final approval” stage with Colorado and planning to begin brewing in December.)

“But in Illinois,” Jorgensen said, “we partnered up with  Church Street and they sell their own beers and own products, and so on. And they already had kind of a streamlined procedure that they use to get approved with the TTB on labels and such. So, it was easier because we had a brewer actually helping us through the process.” (The name of the beer was originally Major Hemp HIPA, but was changed to Major Hemp H-IPA to accommodate the requests of the TTB.)

For Sipp Industries, the move into Illinois represents another advance into what’s shaping up to be a highly competitive and growth-oriented niche market: hemp- and cannabis-infused beverages. The company was developing early recipes and business models in early 2016, while selling bulk hemp products (seeds and oils). Jorgensen recalls kicking around the idea of a hemp-based beer—something to differentiate from the expansive collage of pale ales on tap around the country. After acquiring Illinois-based Major Hemp, the model became clearer. The company first set to work in Colorado, then teamed up with Church Street back in Illinois.

“At first, it was very hard because hemp was not that popular,” Jorgensen said. “It wasn’t in the mainstream as much as you see now. …Within the last six months, we’ve taken some tremendous traction. So, we gambled about two and a half years ago, and now it’s paying off in the investments; we’ve seen that momentum building.”

On Nov. 1, in fact, Sipp Industries announced a financing agreement with Wanderport Corporation—to the tune of a $500,000 credit line. The agreement followed a September 2017 stock swap of 25 million shares; with Sipp’s current value, Wanderport has seen unrealized gains of $1.5 million. While Sipp Industries oversees other ventures, Jorgensen said much of this new credit line will help support beer production through Major Hemp.

As Sipp Industries looks to expanding into more states, like California, Jorgensen said that the business model based on an existing brewer—with a solid regulatory relationship already—will likely be the route they take in the future.

He and his company are, of course, monitoring the status of the 2018 Farm Bill, which would legalize hemp production in the U.S. and open new marketplaces—again, like California—which may currently put some guardrails on hemp farming and product development.