Tilray Brands, the largest cannabis company in the world, just made a move that will also make it the fifth-largest craft brewer and fifteenth-largest overall brewer in the United States. By entering into a deal with Anheuser-Busch InBev to buy eight of their beer and beverage brands, Tilray has fully realized the ambitious plan their President Irwin D Simon introduced less than three years ago. That was when he assumed the company’s reigns after the merger of Canadian cannabis companies Aphria and Tilray to create Tilray Brands.
His plan called for Tilray Brands to become the first cannabis brand to aggressively enter the United States alcohol market to create a consumer packaged goods powerhouse.
“I very much want us to be a branded consumer products company, focusing on adult-use cannabis, medical cannabis, the beer category, the spirits category, and where it makes sense, we will have infused foods,” said Simon in a 2022 interview with Forbes. “Our strategy is very different than anybody else out there. There are no cannabis companies that own alcohol brands today. We will continually look for companies and brands that have an established presence that we can build into a powerful portfolio.”
SweetWater Brewery, one of the main brands in Tilray Brands beer portfolio.
The eight brands Tilray Brands will acquire will slot in nicely next to their current brands, SweetWater Brewing Company, Montauk Brewing Company, Alpine Beer Company, and Green Flash Brewing Company, and fill out their footprint across the United States. They also own Breckenridge Distillery and Happy Flower CBD sparkling non-alcoholic cocktails.
“With this transaction, our beer business is expected to triple in size from 4 million cases to 12 million cases annually,” says Ty Gilmore, president of U.S. Beer at Tilray Brands. “Looking ahead, we will further capitalize on the potential of these brands through product innovation, retailer partnerships, and expanded distribution into key markets, including the Pacific Northwest and California.”
By paying a price equal to $85 million in cash, according to an 8-K filing by Tilray, it seems Tilray got the better end of the deal; especially when you look at the $300 million they paid for SweetWater in 2020. The transaction includes all employees, breweries, four production facilities, and eight brewpubs nationwide.
Shock Top Brewery, one of the beers sold to Tilray Brands from Anheuser-Busch InBev.
Shock Top, a brand created in 2006 to rival Molson Coors
TAP
10 Barrel Brewing Company of Bend, Ore, Widmer Brothers Brewing of Portland, Ore, and Redhook Brewery of Seattle, Wa, expand Tilray Brands footprint into the Pacific Northwest. Breckenridge Brewery of Littleton, CO, further expands its Rocky Mountain presence. Blue Point Brewing Company of Long Island, NY, will pair well with nearby Montauk Brewing to solidify them in the Northeast.
Also included in the deal are Square Mile Cider Company and Hi Ball Energy, which was discontinued in May of this year. All the brands fit into Tilray Brands strategy of bringing in products that could quickly support cannabis extensions if the United States de-criminalizes the drug. Mr. Simon was bullish on the future of Tilray Brands in a statement released with the announcement.
“Today’s announcement both solidifies our national leadership position and share in the U.S. craft brewing market and marks a major step forward in our diversification strategy. We are excited to work with the teams behind these iconic brands that command great consumer loyalty and have a history of delivering strong award-winning products with tremendous growth opportunities. Tilray is fully committed to invest in and champion the future of the U.S. craft beer industry by fueling new innovation that excites and further accelerates the growth of its consumer base.”
“Leveraging the deep CPG expertise of Tilray’s leadership team and acquisition integration track record, we intend to drive both revenue and cost synergies, while significantly expanding national distribution to coveted markets across the U.S. and internationally. In a matter of three years, Tilray has solidified its leadership position in the craft beer industry, and we fully intend to be that change agent that reinvigorates the sector. Upon federal cannabis legalization, we expect to leverage our leadership position, wide distribution network and portfolio of beloved beverage and wellness brands to include THC-based products and maximize all commercial opportunities.”
10 Barrel Brewery, one of the beers sold to Tilray Brands from Anheuser-Busch InBev.
When the whole portfolio is looked at together, Tilray Brands is projecting pro forma revenue of $250 million. That is much-needed revenue to offset a stagnant Canadian cannabis market and should position Tilray Brands to maintain its position as one of the leaders in that segment.
In a time when there are more stories than ever discussing the struggles of craft beer, many still want to invest in the space. From Tilray Brands doubling down on their bet in the market to Bevana Partners reimaging how to bring brands to market, many innovators think the American craft beer industry is the place to be right now.