Tilray Triples Beverage Portfolio with $85M Anheuser-Busch Deal

Beer bottles on conveyor production line. Brewery industry food factory manufacturing.
Photo: Parilov / Shutterstock

NEW YORK – Canadian megacorp Tilray Brands Inc. struck an $85-million cash deal with Budweiser parent company Anheuser-Busch InBev (AB InBev) to purchase eight breweries in the United States. The acquisition will triple Tilray’s beverage production capacity to 12 million cases per year, making it the fifth-largest craft beer company in the country.

The purchase added 10 Barrel Brewing Company, Blue Point Brewing Company, Breckenridge Brewery, HiBall Energy, Redhook Brewery, Shock Top, Square Mile Cider Company, and Widmer Brothers Brewing to a portfolio that already included American craft brands SweetWater Brewery, Breckenridge Distillery, Green Flash Brewing Co., Alpine Beer Company, and Montauk Brewing Company.

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According to Tilray Chairman and Chief Executive Officer Irwin Simon, Tilray initiated the deal in an effort to further diversify its brand instead of waiting for U.S. federal cannabis legalization. But Simon acknowledged the acquisitions also position the company to flip the switch and start delivering THC-infused beverages through any of its adult-beverage brands and related distribution channels the moment regulations change.

“It really positions Tilray in a great spot,” Simon told CNBC’s Squawk on the Street. “Very few companies out there have cannabis, beer, bourbon, and our medical cannabis distribution business in Europe … We’re just not a cannabis company anymore.

“There’s adjacencies out there,” he added, “and there’s no reason one day that every one of these beers can’t be infused with THC if [federal legalization] happens.”

Tilray (TLRY) stock jumped 27 percent to $3.13 per share the day the news broke, marking its highest price since February 16. AB InBev (BUD) stock saw a modest boost, moving from $55.87 to $56.40 per share the day the sale was announced.

“We’re on our way to free cash positive, we have a great balance sheet, [and] I like our stock price today,” Simon told Squawk on the Street. “There’s many times throughout the year where I did not like the stock price.”

According to Simon, the deal with the Belgium-based beverages conglomerate was wholly unrelated to conservative backlash against Bud Light’s recent transgender-friendly advertising campaign, which reportedly cost the company $400 million in U.S. sales. “Nothing [about the Bud Light kerfuffle] had to do with this deal,” he said.

Tilray and AB InBev have a history. In 2018, Canada’s largest cannabis company by revenue and the world’s largest brewer invested a combined $50 million in a CBD joint venture called Fluent Beverage Co. The partnership dissolved in early 2022, with AB InBev subsidiary Labatt assuming control of Fluent and Tilray taking a “royalty-free, perpetual, worldwide license” on the manufacturing technology and signing a co-manufacturing agreement in exchange for its 50-percent share of the company.

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