A Message From the Publisher Happy New Year! Celebrating Twenty Years of Beer

FILED JANUARY 1, 2019

Dear Client:

It's hard to believe that this week marks the twentieth anniversary of the continuous publication of Beer Business Daily, read on toilets every morning all over America, and indeed on every continent except Antarctica, (although with the time differences, they may not always read it on toilets).

Originally called The BeerNet Letter, BBD started as a daily fax to a few Texas beer distributors (A-B distributor Mike Hopkins in Brenham was my first paying subscriber, followed the next day by Larry del Papa of Galveston), and eventually grew beyond Texas as email became more popular as a valid alternative to fax.

A few fun facts about those early days:

BBD was absolutely horrible back then. An abomination. I cringe when I read some of those early issues. I hereby apologize to my first subscribers, and thank you for sticking by me.
The most difficult part about daily publishing was finding an internet connection while traveling. Hard to believe today.
My father thought it was foolish to publish every day, as he thought there wouldn't be enough beer industry news to write about. That notion is laughable today.
Back then, about 75% of readers read BBD on paper, either from the fax machine or after they or their assistants printed it out. Today the vast majority of issues are read on phones or tablets.
My first invitation to speak was at the Washington state beer wholesalers' meeting in Spokane where I nervously addressed about 20 people. I'm quite certain they were disappointed, so I didn't charge them for my flight.
Apparently neglecting to consult a weather map or a calendar, our first Beer Summit was held at the Jefferson Hotel in Richmond, VA in July, 2004 (on the recommendation of former NBWA chair Paul Bertucci, thanks 'tucci). Our second "annual" Summit was held in December in Chicago, also in 2004, leading Miller chief Norman Adami to quip: "Maybe next year Harry can fit in three 'annual' Summits." (August Busch IV was also there, showing up 5 minutes before his scheduled time slot to speak, leading me to my first of many panic attacks in my life).
A SHY KID. When I look back on the last 20 years, I'm amazed by it all. Like, really amazed. I never thought I would overcome my natural shyness and aversion to confrontation to become what is basically an investigative reporter. I had a mortal fear of meeting new people, I felt abject terror at the prospect of public speaking, and I never, ever would have asked an uncomfortable question of my own mother, much less a stranger. If there's a lesson there for your kids or grandkids, it's that anybody can face their fears and change if they have the will (especially if they are broke enough like me).

Once I broke that barrier, I created a damn monster and all of the sudden I loved meeting new people to the point where I would meet them whether they wanted to meet me or not. I remember walking up to a group of grumpy old wholesalers at the NBWA Legislative conference and introducing myself and relaying a story about how the coleslaw at the Hyatt gave me diarrhea. And I recall they stared at each other like, "Who is this fool?". But they remembered my name, and I think one subscribed a few days later.

IT'S THE PEOPLE. The most satisfying and gratifying thing about starting BBD is definitely the people I've met in this industry over the years. I've met great people, I've met "meh" people, and I've met real assholes. And I gotta say, I love the great people and the assholes the most, (and they are often the same people).

One of the things I've learned as I turn 50 years old this week is that the people I initially disagree with -- usually starting with shouting matches over email -- usually end up being great intellectual discourses typically ending with mutual respect, if not friendship. I love disparate ideas, and as I've aged I've become an aficionado of meeting new people of varying ideas, backgrounds, and outlooks, (when you think the opposite would be true of an aging balding white guy).

SIDEBAR: The first time I spoke with Tony Magee of Lagunitas, he called me early in the morning and yelled at me so loudly that I had to hide in the closet so I wouldn't wake my children. I don't even remember what I wrote to piss him off so much, but I do know we later forged a mutually respectful relationship bordering on friendship. Same, at different times, with August Busch IV, Jim Koch, Pete Coors, Dave Peacock, Pete Marino, Tom Long, Bill Hackett, Steve Hindy, my late father, and many, many others including many distributors, industry advocates, lawyers, and the like. I consider those disagreements as the most important learning experiences of my career, and they are like having a heavy machete in dense foliage on the path to the truth.

And so I thank you, my readers, for providing me over 20 years of great, good, and terrible new ideas to pursue. Nothing gets my juices going in the morning more than an email or text from a reader challenging a premise I just made in BBD. Nothing. I love it.

But let's be real: I'm usually right. I've been in this business literally my entire life and I'm no idiot. But a surprisingly high percentage of people who challenge my ideas end up changing my mind, and they will also get space in the letter. As I've always said, I'm never uncertain when writing BBD, but not always right the next day. And I learned long ago to set my ego aside and admit my rare flawed logic or erroneous news freely; because projecting actual reality to our readers always trumps my humiliation of being wrong, sadly.

I was told more than once by my mentor Joe Huggins of Houston Distributing, who tended toward repetition to get points across, "In this business you have to have a rhinoceros hide." He wasn't kidding.

But here's the point. I've learned much more from you than you have from me. That's a fact. And it's the single greatest gift anybody has ever given me, (other than my sons of course yadda yadda). Think of that: My customers not only provide my living, but they provide me with the knowledge to make that living. I'm the luckiest bastard alive, and I appreciate every damn minute of it.

My gift back. And my commitment to you in 2019 and beyond is to always gather as much information from as many sources as we can every day, and present what we believe -- given our institutional knowledge and historical perspective -- to be the truth in our publications.

I can promise you we are not bullied by suppliers (at least not successfully… they sometimes clumsily try), and our only "mission statement" is to tell the truth as we know it to be at the time of publication, no matter what.

That's always been our mission but I am re-dedicating it for 2019 in everything we write in all of our publications. And I think you'll recognize it when you see it, even if that means pissing off some people. (I have three sons who by default will by my best friends no matter what I write, so I always have them to fall back on if everybody else abandons me).

WHAT'S NEW FOR 2019?

A lot of people in the last year have asked me if we're going to launch Marijuana Business Daily? Well, that publication already exists. It was started a few years ago by my colleague Anne Holland and her founding editor Chris Walsh, and it is a pioneering and respected trade publication. In fact, Anne once told me she modeled it after Beer Business Daily in some ways, which was flattering.

I stayed out of cannabis trade reporting because after extensive study and talking to people who are in it I found the industry to be in complete chaos, and not even really a legitimate industry. Even forgetting that THC is still a Schedule 1 drug and illegal federally and virtually unbankable, the states which have legalized it medically and especially recreationally have done it such a haphazard way that, in my opinion, undermines the entire industry.

ED. NOTE: As usual, nobody should allow California to create a model regulatory structure for a new product from scratch. Everything they've done is completely the opposite of what they should've done, and as the LA Times recently chronicled, it's a Shit. Show.

Recall that when the 21st Amendment repealed alcohol Prohibition leaving it mostly to the states to legalize and regulate bev-alc, only then did the states create constructs and laws to make it legal (or remain illegal in many jurisdictions to this day). For weed, it's ass backwards. States are making it legal while the federal government has no voice, and in fact is decriminalizing it's possession.

Let me be very clear: Nobody is going to make any significant money on cannabis in the United States until:

The federal government makes it legal.
The federal government makes it illegal.
Given the political climate, it seems inevitable that Congress will "legalize" or deschedule cannabis with THC and, probably, leave it up the states to regulate it, since the horse is out of the barn on that.
But there's two key pieces of this federal legislation which, if people want it to pass, would make it (almost) palatable to the Bible belt and conservatives against it:

Put it into a larger farm bill (a la hemp), allowing family farms to grow and harvest it, and
Make it a felony to deal weed on the black market.
The feds need to leave it to the states to legalize in a structured and localized way, but otherwise it needs to be a felony. Seriously, a felony, like bootlegging whiskey. While decriminalization is en vogue for weed at the moment, and perhaps that's appropriate for former minor offences, the opposite should be true if it becomes a federal matter.

Look, the reason that California, Colorado, Washington, Oregon, etc. aren't seeing the excise tax revenues they expected is because there is still a very robust and cheap black market, and nobody is enforcing it anymore. Ask any Kentucky moonshiner in 1940-50s if he was harassed by federal agents and the answer is yes. Dukes of Hazzard much?

You can't have one without the other. Either it's an orderly and legal market run by the states with a big federal felony hammer on the black market, or it's like selling Stoli in Russia: You never know what you're going to get. To paraphrase Lyndon Johnson, "Most laws end up being either chicken shit or chicken salad." And legalizing pot federally without a strong prohibition against its black market trade is chicken shit for everybody.

So here's the thing: Recognizing that the industry is completely chaotic, we've been working on creating a value-added publication to address that very chaos -- specifically for bev-alc marketers -- for over a year. But we didn't want to add to the daily email noise, as there's already enough newsy information, and you're tired of reading.

It's been my wish and my work for a year now to create a publication that takes deep dives, about once a week, and unpacks what is really going on out there. We've developed a network of experts in the industry to contribute, in addition to our in-house writers, to bring you the no-bullshit read on what's going on in this terrible shit-show of an industry.

Look, it's going to be a big industry, we cannot deny that. It already is. We just don't know how it's going to shape out. So my editors and I spent the last year creating this weekly-ish pub to provide research, original on the ground intel, and a summary of the relevant news in the THC and CBD industries, and how beverage alc can agree to take part, or more importantly not take part. And perhaps most importantly, how to drive regulation so cannabis isn't given a free pass.

It's called the Magu Report, named after the Chinese goddess of hemp.

I'll warn you, it's expensive by design, not blunder. So if you're not into it, it's probably not for you. We're not looking for a wide readership. I'm looking for a limited serious readership who is engaged with me and our writers to teach each other this new industry, just as we've done in beer.

This will be, I would submit, the only trade publication in the space that's not overly rah-rah on the industry, because we're not beholden to a myriad of vendors, some of whom are shady. This industry is chock full of snake oil. This pub will expose all the warts, and that's what makes it different when you're ready to invest, or not to invest. This letter will guide you around the potholes.

If you're interested ($1,400/year, or $1,200 if a current subscriber), email Jessica at jessica@beernet.com and she'll set you up on Wednesday. First issue comes in mid-January.

I'm really looking forward to adding this different kind of publication to our stable of trade publications covering the beer, wine, and spirits industries. I'm thinking of it as a new adventure to cast an honest eye on a burgeoning new industry which will likely have a large impact on bev-alc.

In the meantime, we will will release our beer predictions issues over the next two days. I think you'll find them interesting.


Until tomorrow,

Harry

P.S. Like I said, if you don't want to subscribe because you think it's too expensive, that's fine, it's probably not for you. There are plenty of free resources out there available to you. But if you want to join the journey, give Jessica a ping on Wednesday at jessica@beernet.com or 210-805-8006.

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