Exhibit 99.3


                     FREDERICK BREWING CO. EXPANDS BREWERY,
                          DISTRIBUTION AND PRODUCT LINE


For Immediate Release

September 22, 1997

Frederick, Maryland - Frederick Brewing Co. (Nasdaq Small Cap: BLUE), brewers of
the "Blue Ridge" and "Hempen" families of craft beers, announced today that the
company received the last of eight new 200-barrel fermenters purchased to expand
brewery capacity. This addition expands production capacity at its new brewery
to approximately 80,000 barrels per year, which represents an 80 percent
increase.

The decision to add capacity was driven primarily by the company's ongoing
expansion of marketing territory and continuing sales growth of its "Hempen
Ale," North America's first beer brewed with hemp seeds. After doubling during
the quarter ending June 30, 1997, Frederick's revenues for July and August were
more than 2 1/2 times greater than last year ($871,000 in 1997 vs. $258,000 in
1996). Bucking flat or declining sales trends reported by other craft brewers,
company president Marjorie McGinnis stated: "Our shipments to markets open for
at least one year were up 39 percent this July and August over last year (2100
barrels in 1997 vs. 1500 barrels in 1996) and the Blue Ridge brands alone were
up double digits. We have recently hired two new sales representatives to cover
the southern New England states and Georgia, bringing the total number of
representatives to eleven. Past performance indicates that sales in these
territories should increase significantly.

Since July 30, 1997, the company has established distribution in 26 new markets,
including nine additional states. According to McGinnis, "Frederick's near-term
strategy is to distribute Hempen products nationwide, while building Blue Ridge
into a leading brand in our eastern region. With these new fermenters, we will
be able to pursue our goals without concern for outgrowing our capacity for some
time." Hempen Ale is now sold in all or parts of 21 states, and Blue Ridge
brands are available in seventeen.

The new fermentation tanks will also be used to brew Frederick's newest beer,
"Hempen Gold," a cream ale brewed with hemp seeds. McGinnis stated: "Hempen Gold
is a lighter, less hoppy beer, which allows more of the hemp flavor to come
through. It will appeal to those drinkers who prefer a less aggressive flavor
profile. It should be a great complement to Hempen Ale." Hempen Gold will be
released to wholesale distributors starting September 22, 1997.

A $2.0 million private placement of convertible preferred stock issued to
accredited domestic investors financed these recent expansions. The company has
filed a registration statement to permit the public sale of approximately 1.3
million shares of common stock underlying the preferred stock. After fees and
expenses, the offering netted Frederick Brewing approximately $1.7 million. As a
condition of the offering, the company extended its agreement with the investor
relations firm Corporate Relations Group, Inc. and affiliated companies, and
prepaid $305,000 for these additional investor relations services.

According to Frederick Brewing CEO Kevin Brannon, of the remaining $1.4 million,
approximately $550,000 will be spent on the capacity expansion and other capital
improvements. Pursuant to a prior agreement, $180,000 was paid to redeem
convertible preferred stock issued to the general contractor for the building of
the brewery. The remaining proceeds will be used for working capital. The
investor relations expense will result in a one-time $305,000 charge in the
third quarter, which will have a substantial impact on the company's financial
results, and the company will continue to show substantial losses. Brannon
noted: "If revenues continue to grow as they have, and our production efficiency
continues to improve as projected, we should reverse these operating losses in
the fourth quarter of 1997."

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While the company does not expect to utilize all of the new brewing capacity
immediately, completing the entire project at once reduced the overall cost of
equipment and the disruption caused by expansion. In addition, he said, "We were
running close enough to capacity that we were unwilling to market our brewery to
contract brewers for fear of being unable to meet demand during our peak winter
holiday season. We now have the capacity to meet our current and anticipated
demand over the next several months, in addition to brewing other brands."
Brannon indicated that Frederick expected to begin brewing a brand owned by a
Pennsylvania company during the fourth quarter and is negotiating with other
potential contract brewers.

For more information, contact Ron Jones with Corporation Relations Group, Inc.
at 800-444-4980 or Kevin Brannon/Marjorie McGinnis with Frederick Brewing Co. at
301-694-7899.

Except for historical information, this press may contain forward-looking
statements that involve risks and uncertainties including, but not limited to,
quarterly fluctuations in results, the management of growth, competition and
other risks detailed in the company's SEC filings. Actual results may differ
materially from such information set forth herein.