This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
Tilray buys four craft brewers from Molson Coors
The blending of beer and cannabis businesses continues. Ron Emler reports.
The latest deal is Canadian cannabis group Tilray moving further into the US beer market by agreeing to buy four craft brewers from Molson Coors.
It is acquiring Hop Valley Brewing Company (Oregon), Terrapin Beer Co (Georgia), Revolver Brewing (Texas) and Atwater Brewery (Illinois) for an undisclosed sum.
This, it says, will significantly expand its beer portfolio, swelling its customer base by 30%.
Tilray has bought several drinks producers over the past year to boost its crafts beer portfolio, amid weakness in the cannabis business.
It made its first move into the alcohol market in 2020 when it took over Sweetwater Brewing Co.
Last year, the company bought eight beer and beverage brands from Anheuser-Busch InBev for $85 million in cash.
Tilray’s Chief Executive Irwin Simon says it is eyeing more beer market opportunities in the U.S. “This will not be our last deal”, he said.
Deals between cannabis producers and brewers have not always been the bonanza predicted.
The prime example is how Constellation Brands, which produces the best-selling Modelo and Corona beers in the US, has rowed back from its pre-Covid ambitious $4 billion stake in Canopy Growth, which was then by far Canada’s largest cannabis business.
While still retaining a large stake, Constellation has quit any management input to Canopy and written off more than $1 billion of its stake.
Last year, it also sold out of its craft brewing investments at a cost of about $75 million.
Molson Coors said the craft beers sale to Tilray is part of an effort to streamline its business.
“This move allows us to focus our time, energy and resources behind the initiatives we believe will best help us meaningfully grow our U.S. above-premium portfolio in beer and beyond beer,” Molson Coors Commercial Chief Michelle St. Jacques said in a statement.
While cannabis is fully legalised in Canada, the US is a difficult market for producers despite its undoubted attractions.
It is fragmented because individual states have different degrees of acceptance between full legalisation, use solely for private consumption and banning.
The Biden White House has regularly hinted at introducing federal legalisation but nothing has transpired.
Much could depend on who moves into the White House next January after November’s presidential election.
The other problem is that market penetration is limited due to consumers preferring their own-grown product, which is cheaper than more expensive commercial brands.
Tilray’s goal of becoming a “beacon for craft brands” gives it an immediate profile in new areas and provides a ready-made distribution network if and when cannabis becomes legalised in more US states.
Meanwhile, while the big brewers cut their stakes in craft beer as the trend retreats, Tilray is bolstering a significant second string to its bow.
Related news
Cannabis producer Green Thumb eyes Boston Beer merger