Dive Brief:
- Cannabis company Tilray Brands said it has reached a deal to purchase eight beer and beverage brands from Anheuser-Busch. Terms of the deal were not disclosed.
- Tilray will acquire Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company and HiBall Energy. The expected sales volume of the acquired brands will elevate Tilray to the 5th largest craft beer player in the U.S., up from 9th place.
- The purchase comes as cannabis companies deal with a crowded marketplace and struggle to make meaningful progress in the U.S. without federal regulations, leaving them to turn to other revenue channels for growth.
Dive Insight:
As marijuana companies adjust to a new frontier, beer could be the answer.
Tilray has been actively snapping up craft beer brands during the last few years. Last November, it acquired craft brewer and hard seltzer maker Montauk Brewing. The company’s biggest entrance into the space before today came through the purchase of pot company Aphria. The deal, which closed in 2021, brought Atlanta-based Sweetwater into the fold.
Late last month, Tilray CEO Irwin Simon told Reuters he was focused on “acquisitions within the beverage industry, which I think is a big business.” He told the wire service he sees Tilray’s beverage alcohol segment growing to a $300-million-plus business in the coming years.
Tilray’s net revenue for the beverages segment during its fiscal year ended May 31 was $95 million, an increase of 33% from the same period a year earlier. Overall, Tilray posted $627 million in revenue.
“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,” Simon said in a statement. “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.”
Ty Gilmore, president of U.S. Beer at Tilray, said the transaction is expected to triple its business in the category from 4 million cases to 12 million cases annually. He added that Tilray will look to grow the brands through product innovation, retailer partnerships and expanded distribution into key markets, including the Pacific Northwest and California.
Tilray estimated it will have about 5% of the craft beer market once the deal closes.
Andy Thomas, president of the high-end business unit at Anheuser-Busch, said Tilray reached out earlier this year expressing interest in the brands and breweries. He told Reuters that Anheuser-Busch, part of AB InBev, is still committed to other craft beer brands in its portfolio.
