Hard kombucha soda, THC drink brewer hopes to expand business with marijuana license
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At BŪCH Fermentary & Taproom in northeast Minneapolis, Ryan Appleby is confident you’ll “feel good about being bad” when cracking open a can of his boozy or cannabis-infused beverages.
Once a big fan of “very hoppy IPAs,” Appleby brewed beer at home as a hobby. In 2012, after returning from his second deployment in Iraq, he anticipated a bunch of nice beers waiting for him. But after just two, Appleby quickly realized his body could no longer handle beer.
“I got really bloated, my skin got red, blotchy, I just got super tired,” he said. “And it was upsetting because I liked making my own alcoholic drinks.”
This was before White Claw’s launch in 2016 and hard seltzers weren’t popular yet.
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“I was looking for something that was just as clean, easy to drink, no sugar, as few calories as possible,” Appleby explained. “It didn’t exist.”
So, he went back to the drawing board in hopes of creating a healthier way to enjoy an adult beverage.
BŪCH is born
At the time, Appleby was making his own kombucha — which, for the uninitiated, is a tea-based, low-calorie, lightly-carbonated beverage popular for its potential health benefits. So, he combined his kombucha with vodka and soda water, and his first iteration of hard kombucha soda was born.
Fast forward to 2020, when Appleby enlisted two of his army buddies to brew up a proof of concept, which they did in a sublet corner of a St. Louis Park manufacturing facility.
"We basically walked into that space trying to figure out how do we make it from a gallon at a time to hundreds of gallons at a time?" Appleby recalled. “We were just bootstrapping the company… I basically drained my savings to get us to that point.”
While scaling up production, the founders also navigated scaling a company. BŪCH debuted its inaugural flavor — grapefruit ginger — in July 2021 with success.
The monthslong slog of securing a small business loan and several different licenses followed.
“It always takes way longer than we want them to,” Appleby said. “Every year [we] just slowly, slowly grew a little bit more and more.”
Appleby acknowledged “it has been a tough road, being kind of the pioneers… in the Midwest, where most people don’t even know what Kombucha is.”
Even so, cherry rosemary, lychee lemongrass and passionfruit elderflower joined the flavor lineup and a fourth army buddy joined the business.
BŪCH is organic, free from sugar and gluten, and has added electrolytes and vitamin C in an effort to curb any negative effects from the alcohol itself, according to sales manager Jennifer Earley.
“The aroma, initially when you crack the can or you have your pint in front of you, smells like summer,” Earley said, describing strawberry rhubarb. “It has a beautiful pink tinge to it. So it’s aesthetically pleasing. And then it’s not filling, you’re not feeling bloated.”
Tapping into the THC market
In 2022, the BŪCH crew found a new home for their business in northeast Minneapolis — formerly Able Seedhouse + Brewery’s space — with a bigger production setup and a taproom.
That year, the Minnesota Legislature, somewhat by accident, legalized low-dose THC beverages by reclassifying cannabinoid-containing foods as edible hemp products — meaning they aren’t subject to FDA scrutiny.
“And that is ultimately where, at least in the state of Minnesota, the Wild West really began,” Bob Galligan, director of government and industry relations with the Minnesota Craft Brewers Guild, said. “Because it legitimized the products, but it also had no regulation whatsoever around it.”
With their military background, Appleby and his partners hadn’t considered getting into cannabis. “It wasn’t really on our radar,” he said.
But then a fellow brewer asked to use BŪCH’s yet-to-open taproom for an all-THC popup, and Appleby’s team hit the gas, spinning up BŪCH Bliss, a THC-infused, zero-alcohol kombucha soda, just in time for the event.
“We were actually slapping on labels on individual cans that morning, just trying to make sure that we had enough product,” Appleby recalled with a laugh. “It was a win-win-win for everyone.”
Since then, BŪCH has built out two lines of THC-infused drinks, Bliss and Simpl, a straight seltzer infused with hemp-derived THC.
“We did everything by the book because we knew that eventually, you know, things are going to tighten down as far as the rules and regs,” Appleby said. “We didn’t want to have a target on our back when these government agencies finally do crack down on people.”
Legal limbo ahead of licensing
The Minnesota Office of Cannabis Management has been rolling out hemp and marijuana regulations in phases.
“We’ve seen prohibition, especially for those of us in the alcohol industry. And we know that it just doesn't work. But regulation very much does work,” Galligan said. “In Minnesota, we were the first to really take that gray area and move it into actual white, black, defined language that says you can produce these products, you can serve these products, but they do have to be labeled correctly. They do have to meet testing requirements and all of that. So again, much better than it once was, but still a confusing time.”
Earley attested to the ambiguity complicating sales, saying there are constant rumors about what’s legal in the industry.
”There isn’t one place that I go to look for the answer, it’s a conglomeration of a million different options,” she said.
Recent estimates value the Minnesota THC drink market at more than $100 million. Upwards of 4,000 businesses are registered with OCM to sell or manufacture hemp-THC products, which are subject to a 10 percent tax.
In a major milestone for the young industry, the window for the first round of preapproval applications for a business license closes at midnight on Monday.
Each of those budding entrepreneurs is a social equity applicant, meaning they or a direct family member has been convicted of possessing or selling cannabis, lives in an impoverished area where cannabis crimes are highly enforced, or is a military veteran. OCM will then use a lottery to select who will get the state’s first licenses. That date hasn’t been decided yet, but OCM’s interim director recently told MPR News the rules for full-scale retail cannabis are on track for adoption in early 2025.
However, a proposed amendment to the stalled 2024 federal Farm Bill could close loopholes that legalized the present hemp industry.
As a veteran, and amid the uncertainty, Appleby isn’t taking any chances.
“We definitely don’t want to… have all our eggs in one basket as far as relying on hemp. And so I am putting in for the social equity application,” he said.
As he waits to find out if his number is drawn, Appleby hopes people will give BŪCH — whether spiked or infused — a try and share their thoughts.
“We can constantly improve upon the product and give people what they’re looking for,” Appleby said. “And just to let you know, I appreciate criticism so much more than I do praise” because no two palettes are the same.
