Minnesota’s first cooperative brewery has exited bankruptcy protection and plans to spend millions to upgrade equipment and grow sales through the coming years by producing THC seltzers for other brands.
Fair State Brewing Cooperative won court approval this summer for its plan to cover millions owed to suppliers, lenders and others that threatened the viability of the business.
“This milestone represents a fresh start for our brewery,” CEO Evan Sallee said in a prepared statement last month. “As we embark on this next chapter, we are more excited than ever about the future.”
Part of that comes from its revenue projections: By 2027, sales could surpass $14 million after hitting just $830,000 last year, according to court filings.
The brewery will funnel boosted profits into $3.3 million in new equipment through the next three years, according to the financial outlook.
The expected sales growth is largely due to contracts the brewery has to manufacture hemp-derived THC drinks for other companies, which is already Fair State’s largest revenue stream. This year, the brewery expects to earn $2.5 million from its cannabis co-manufacturing operation, 64% of total projected revenue.
Fair State also produces and distributes its own cannabis beverages, Chill State.
Closures during the pandemic, skyrocketing ingredient costs and lost customers or delayed deals all contributed to a mountain of debt that culminated with a cash crisis earlier this year, according to court documents. An inability to obtain certain federal pandemic aid because of IRS rules about cooperatives filing taxes on paper also contributed to the shortfall that led to the Chapter 11 bankruptcy filing in February.
