September 14, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

From its start as a pioneer in cannabis research, cultivation, and distribution, Tilray Brands is now a leading global cannabis-lifestyle and CPG company with operations in Canada, the U.S., Europe, Australia, and Latin America and a production platform that supports over 20 brands in more than 20 countries. 

Deepening its reach and divesting its presence, Tilray announced it has agreed to acquire eight craft beer and beverage brands from Anheuser-Busch – a deal which once closed, would make Tilray the fifth largest craft beer brewer in the U.S. with 5 percent of the craft beer market.

Once completed, Tilray will own Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy, along with all currently employees, breweries, and brewpubs associated with the brands. 

These new acquisitions, which span Oregon, Colorado, New York, Washington, and Idaho, will join an existing portfolio including SweetWater Brewing Company, Montauk Brewing Company, Alpine Beer Company and Green Flash Brewing Company. Tilray also owns whiskey maker Breckenridge Distillery, and Happy Flower CBD sparkling non-alcoholic cocktails.

“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,” said Irwin D. Simon, chairman and CEO, Tilray Brands.

“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.”

The overall U.S. beer market shrank by 3 percent by volume in 2022, according to the Annual Craft Brewing Industry Production report for 2022, however, retail dollar value for the industry was estimated at $28.4 billion, posting a 24.6 percent market share and 6 percent growth over 2021. 

That same year, the number of operating craft breweries in the country hit a record high at 9,552. When broken down, this number represents 2,035 microbreweries, 3,418 brewpubs, 3,838 taproom breweries, and 261 regional craft breweries, with more breweries opening in the year compared to closing at 549 to 319, respectively.

Given Tilray’s scale and experience, it is well-positioned to drive growth for its portfolio companies amid this industry landscape. 

“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,” said Simon.  

“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.”

With this significant expansion to its portfolio of established brands with loyal customer bases, and distribution relationships through the Anheuser-Busch system, Tilray stated that it projects to generate craft beer pro forma revenue of $250 million.

“Tilray Brands reached out to us early this year with interest in purchasing these brands and breweries, and since then, we’ve had many positive conversations that led to today’s announcement,” said Andy Thomas, president, The High End, Anheuser-Busch.

“The talented people behind these brands and breweries, along with our significant investments in them over the years, have positioned them for a bright future with Tilray Brands. We are committed to working with Tilray Brands over the coming months to ensure this is a smooth transition for the people who are working every day to get these amazing beers and beverages to consumers across the U.S.”

Ty Gilmore, president of U.S. beer with Tilray Brands, also noted that Tilray is not done building out its portfolio, adding, “With this transaction, our beer business is expected to triple in size from 4 million cases to 12 million cases annually.”

“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.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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