Cook the bacon in a large heavy pot or Dutch oven over medium-high heat, until browned and slightly crispy, about 5 minutes. Add the onions, salt, cayenne, black pepper, sugar, and bay leaves. Cook, stirring, until the onions are soft, about 5 minutes. Add the cabbage and stir to mix well. Cook, stirring, until the cabbage just begins to wilt or soften, 3 to 4 minutes. Reduce the heat to medium-low, and add the beer. Stir to mix.
Cover and simmer, stirring occasionally, for 1 hour. Remove the bay leaves. Remove from the heat and serve warm.
Makes 2 quarts, 8 to 10 servings