Short's Brewing Company has sold a 19.99 equity stake to Heineken-owned Lagunitas Brewing Company, the Bellaire company announced Wednesday.

According to Short's, the partnership "stems from Short’s desire to successfully navigate the ever-evolving craft market while maintaining its creatively fearless identity." Short's will maintain its "individual brand image while gaining additional resources for continued opportunity to invest in Short’s staff, the northern Michigan community, and opportunities to push the boundaries of creativity," according to the company.

The equity stake of California-based Lagunitas - the ninth largest brewery in the country - will be managed by Lagunitas U.S. Holdings, or LUSH. Heineken International took full control of Lagunitas in May after initially purchasing a 50 percent stake of the company in 2015. A press release from Short's announcing the deal with Lagunitas did not mention Heineken.

"This partnership with Lagunitas is just another part of evolution in the cycle of our dynamic and growing business," Short's owner Joe Short said in a statement. "I've grown so much personally and professionally during my time at the helm of Short’s Brewing Company that I understand now, more than ever, the continued success of Short’s and its people rely on me to make smart and strategic decisions. This is just one of them.”  

Terms of the deal will still allow Short's to be defined as a craft brewer under the guidelines of the influential Brewers Association. That organization stipulates that in order to be a craft brewer, less than 25 percent of the company can be owned or controlled by an alcohol industry member that is not itself a craft brewer. If Lagunitas' stake in Short's were to climb higher than 25 percent, Short's would no longer be considered a craft brewer under the guidelines. Founders Brewing Company lost its craft brewer designation in 2014 following a deal with Spain's Mahou San Miguel group for a 30 percent stake of the company.

The Lagunitas deal comes a year after Short's announced plans to distribute outside the state of Michigan for the first time. The expansion came as a surprising move for a brewery that long marketed itself as “Michigan Only, Michigan Forever” – but reflected the increasingly crowded nature of the state’s craft beer market, which is pushing local breweries to look outward even as new companies flood in. At the start of 2015, there were 159 craft breweries in Michigan, according to the Brewers Association. As of mid-2016, that number had climbed to 203 breweries with distribution agreements, with close to 300 total brewing establishments calling Michigan home.

Short's has cited industry competition and production capacity limitations as contributing factors to its search for solutions to further grow the company.