Philly Beer Week goes to pot

Philly Loves Beer… and weed, apparently.

The non-profit organization that runs Philly Beer Week says its goal is to promote the city’s “authentic beer experiences.”

Yet, the title sponsor of beer week’s Opening Tap festival is a decidedly un-beerlike company: TerraVida Holistic Centers, Pennsylvania’s largest medical marijuana dispensary.

The company paid an undisclosed amount to have its logo plastered on Opening Tap promotional materials – a move that sparked considerable dissension among some members of the non-profit’s board of directors.

My sources at Philly Loves Beer say TerraVida’s sponsorship was sprung on the board by its executive committee during a board meeting this week. There was no board discussion or vote before the organization cashed the sponsorship check, the sources say; the decision was reportedly made by the group’s five-member executive committee.

In an email, the organization’s executive director, Christina Dowd defended the decision to take the pot check:

“As a non-profit, we look for sponsorships from a variety of different sources. We don’t see medical marijuana and beer as competing. Our organization vetted this sponsorship extensively from both the staff and the Executive Board.”

After I contacted other board members for comment last night, they told me they had received emails from the organization’s leadership warning them not to speak with me.

“They’re freaking out over how this is going to look,” one board member told me.

(Disclosure: I was a founder and first executive director of Philly Beer Week. I left the position in 2013.)

Cannabis is a hot-button issue in the craft beer industry.

At first glance, weed would seem to be a direct competitor with craft beer and a mortal threat to bars and breweries. (And, yes, I know this is “medical” marijuana. But that’s only for now; even TerraVida acknowledges its long game is recreational use.)

Many in the beer industry worry that legal cannabis will cut into its market – especially as craft beer sales growth has flattened over the past year. As one local brewery owner told me, “Weed is my competition.”

Some marijuana proponents say it should be embraced because there’s a natural crossover between weed and craft beer, with many people enjoying both. Indeed, there is a growing trend of non-alcoholic beer infused with THC, the active ingredient in cannabis, or cannabidiol (CBD).

(Currently, it is illegal in the United States to manufacture pot-infused beer containing alcohol.)

A 2017 retail study by industry groups predicted recreational marijuana could steal more than 7 percent of beer revenues.  However, a recent study by the Brewers Association showed that threat may be overblown because recreational pot smokers do not automatically give up alcohol once cannabis is legal.

At least one big beermaker is hedging its bets: Anheuser-Busch InBev recently announced it would spend up to $50 million to develop non-alcoholic beverages containing THC and CBD.

Right here is a good place for me to say: I’m not opposed in any way to medicinal or recreational use of marijuana.

But in my opinion, taking money from the pot industry is a bad look for a non-profit organization that was founded to support the local beer industry.

Putting aside the issue of competition, alcohol – like marijuana – is a drug. Beer is constantly under fire from prohibitionist forces and, indeed, it wasn’t so long ago that the conversation was dominated by talk of “problem” bars. Promoting marijuana and alcohol together threatens beer’s hard-earned reputation as a wholesome, craft-made product that supports communities, serves as a tourist attraction and welcomes families.

Philly Beer Week’s organization was so cautious of its image that its original rules prohibited sponsorship from tobacco companies. It has more recently struggled with the weighty issue of accepting membership fees from Big Beer (including ABI’s Goose Island brewpub in Fishtown).

And now it’s taking money from Big Weed?

The decision to accept the TerraVida’s sponsorship cash reportedly stems from Philly Loves Beer’s tight finances. Between 2015 and 2016, the non-profit’s annual revenues plummeted nearly 25 percent, according to its most recent IRS Form 990 filing. It has not fared any better in more recent years as Beer Week participation fees – its main source of revenue – have reportedly declined as bars and restaurants have dropped out of the organization.

Moreover, its Opening Tap festival – the kick-off to Beer Week, and previously one of its main sources of revenue – has been losing money, according to the tax filings. In 2016, the event – held at The Fillmore Philadelphia – brought in about $43,000. But due largely to a one-night rental fee of $28,800, the event ended up almost $3,000 in the hole.

While struggling to meet its financial obligations, Philly Loves Beer has cut expenses. It stopped publishing its annual guide of events, it pulled the plug on its popular smart phone app, and it dropped its public relations firm.

Additionally, this year it moved Opening Tap to the less prominent 2300 Arena, located in an old freight warehouse and former pro wrestling venue below an I-95 overpass in the Whitman section of South Philly. (To its credit, it has not raised ticket prices to cover costs.)

Though the amount of TerraVida’s payment to Philly Loves Beer was not disclosed, it is almost certainly a drop in the bucket for the weed retailer. In a recent interview with Philly.com, the company’s owner bragged that the company is moving up to 40 pounds of marijuana – plus concentrates and other products – each week.

At $300 an ounce, that’s at least $10 million in sales per year.

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