Tilray is expanding its market share by buying beer brands. In particular, Tilray announced a deal to buy eight beer and beverage brands from Anheuser-Busch Companies LLC.
According to the U.S. Securities and Exchange Commission, the deal is worth $85 million. Tilray will pay for the beer brands in cash.
Tilray says this purchase will triple their sales to 12 million cases of beer a year. If successful, Tilray’s purchasing of eight beer brands will elevate them to the fifth-largest craft beer operation in the United States.
This begs the question – Is Tilray even a cannabis company anymore?
Tilray Buys Beer Brands
Tilray’s buy of eight beer brands from Anheuser-Busch includes ciders and seltzers. The eight brands are:
Tilray CEO Irwin Simon said in a statement that the acquisition “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.”
He also said Tilray’s beer brands would help them leverage THC-based beverages.
“Upon federal cannabis legalization,” he said, “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.”
Shares of Tilray rose significantly in response to the news.
Should Cannabis Companies Diversify into Alcohol?
Tilray’s purchase of eight beer brands from Anheuser-Busch has its critics. Some believe a cannabis company shouldn’t diversify into non-cannabis brands, especially alcohol.
Alcohol companies have long been at odds with the cannabis movement.
First, there is the elephant in the room. Alcohol is a poison, whereas cannabis is a medicinal herb. Alcohol causes health problems, whereas cannabis heals. Many former problem drinkers have gone “Cali sober,” where they substitute cannabis for booze.
We don’t have to stretch that far into history to discover what Anheuser-Busch really thinks of pot. As late as 2010, they donated thousands of dollars to prevent cannabis legalization.
Before 2018, when they announced InBev to develop cannabis-infused beverages, Anheuser-Busch had been a long-time anti-cannabis lobbyist in Washington and elsewhere.
Will this association with alcohol (and Anheuser-Busch) negatively affect Tilray’s brand? What about in the long term? Time will tell, but so far, shareholders are happy about Tilray’s purchase of eight beer brands.
Poor Strategy on Anheuser-Busch’s Part?
Tilray buying eight beer brands from Anheuser-Busch is looking good for their bottom line. But what about Anheuser-Busch? Why did they sell?
The beer giant has been on a rocky road in 2023. The company’s flagship product, Bud Light, has been at the center of consumer boycotting.
Earlier this year, Bud Light partnered with a transgender activist – Dylan Mulvaney – for a marketing campaign that backfired completely.
The backlash wasn’t surprising, considering the more conservative-leaning customer base of the product.
As well, Dylan Mulvaney is incredibly sexist. (His idea of being a woman, for example, is saying, “I’m fine,” when you’re not—reinforcing negative stereotypes of women.)
Bud Light and its parent company have lost nearly $400 million in sales and laid off hundreds of workers as customers switch to Modelo and other beers.
So long as Tilray’s beer brands don’t insert themselves into the culture war, then Tilray’s purchase should pan out successfully.
The issue comes back to cannabis consumers. Will they trust a cannabis brand that also deals in alcohol?
Or is a cannabis company trying to straddle both worlds?
The financials look good for Tilray but don’t be surprised if conscientious cannabis consumers take their business elsewhere.
Then again, conscientious cannabis consumers tend to avoid these corporate conglomerates like the plague. Tilray started in Canada, where weed is legal, but the “illicit” market still accounts for nearly half of all sales.
Tilray buying beer brands is just another brick in the corporate-state wall enclosing around us.