Tilray Brands, the largest cannabis company in the world, just made a move that will also make it the fifth-largest craft brewer and fifteenth-largest overall brewer in the United States. By entering into a deal with Anheuser-Busch InBev to buy eight of their beer and beverage brands, Tilray has fully realized the ambitious plan their President Irwin D Simon introduced less than three years ago. That was when he assumed the company’s reigns after the merger of Canadian cannabis companies Aphria and Tilray to create Tilray Brands.
His plan called for Tilray Brands to become the first cannabis brand to aggressively enter the United States alcohol market to create a consumer packaged goods powerhouse.
“I very much want us to be a branded consumer products company, focusing on adult-use cannabis, medical cannabis, the beer category, the spirits category, and where it makes sense, we will have infused foods,” said Simon in a 2022 interview with Forbes. “Our strategy is very different than anybody else out there. There are no cannabis companies that own alcohol brands today. We will continually look for companies and brands that have an established presence that we can build into a powerful portfolio.”
The eight brands Tilray Brands will acquire will slot in nicely next to their current brands, SweetWater Brewing Company, Montauk Brewing Company, Alpine Beer Company, and Green Flash Brewing Company, and fill out their footprint across the United States. They also own Breckenridge Distillery and Happy Flower CBD sparkling non-alcoholic cocktails.
“With this transaction, our beer business is expected to triple in size from 4 million cases to 12 million cases annually,” says Ty Gilmore, president of U.S. Beer at Tilray Brands. “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.”
By paying a price equal to $85 million in cash, according to an 8-K filing by Tilray, it seems Tilray got the better end of the deal; especially when you look at the $300 million they paid for SweetWater in 2020. The transaction includes all employees, breweries, four production facilities, and eight brewpubs nationwide.
Shock Top, a brand created in 2006 to rival Molson Coors TAP
behemoth Blue Moon, must be considered the gem of the package. It has a nationwide footprint in all ABInBev sets and, for years, has been the focal point of numerous advertising campaigns. Its rotating seasonal lineup of 12-packs, one of the hotter packages on the market, will only help Tilray and its distributors maintain and expand their presence in retail.
10 Barrel Brewing Company of Bend, Ore, Widmer Brothers Brewing of Portland, Ore, and Redhook Brewery of Seattle, Wa, expand Tilray Brands footprint into the Pacific Northwest. Breckenridge Brewery of Littleton, CO, further expands its Rocky Mountain presence. Blue Point Brewing Company of Long Island, NY, will pair well with nearby Montauk Brewing to solidify them in the Northeast.
Also included in the deal are Square Mile Cider Company and Hi Ball Energy, which was discontinued in May of this year. All the brands fit into Tilray Brands strategy of bringing in products that could quickly support cannabis extensions if the United States de-criminalizes the drug. Mr. Simon was bullish on the future of Tilray Brands in a statement released with the announcement.
“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. 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.”
“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. 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.”
When the whole portfolio is looked at together, Tilray Brands is projecting pro forma revenue of $250 million. That is much-needed revenue to offset a stagnant Canadian cannabis market and should position Tilray Brands to maintain its position as one of the leaders in that segment.
In a time when there are more stories than ever discussing the struggles of craft beer, many still want to invest in the space. From Tilray Brands doubling down on their bet in the market to Bevana Partners reimaging how to bring brands to market, many innovators think the American craft beer industry is the place to be right now.
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
