Makers of Budweiser and Cannabis Company Partner for Pot Drinks
Another massive beverage company is investing millions in Canada’s legal cannabis industry.
Following 2016’s and 2017’s historic expansions of medical and adult use cannabis legislation in the United States, 2018 has wrought some continental shifts in marijuana policy of its own. In October, of course, Canada became the second nation in the world and the fist G7 nation to legalize cannabis for adults. Even the U.S. passed a law this year amending its Controlled Substances Act (for the first time since 1970) to exclude hemp and all of its derivatives. And the list of state expansions to medical cannabis programs and the successful implementations of adult use laws is too long to enumerate here.
But what it adds up to is massive consumer spending on legal weed, with industry analysts projecting a $47.3 billion dollar market within a decade. Indeed, it’s numbers like that, that are (finally) attracting the big fish—the biggest fish—to cannabis. Just ask Canadian cannabis giant Tilray, which just netted a $50 million dollar deal with Anheuser-Busch to R&D non-alcoholic cannabis-infused beverages.
Anheuser-Busch Teams Up With Tilray Inc. to Develop CBD and THC Drinks
On Wednesday, Tilray, Inc. and Anheuser-Busch InBev announced a partnership to study non-alcoholic beverages infused with THC and CBD. AB InBev is throwing in half of the deal’s $100 million investment. Tilray is matching funds. Anheuser-Busch, which the Busch family sold to the Belgium-based international beverage company InBev in 2008 for $52 billion, now owns more than 500 beer brands, like Budweiser and Stella Artois.
(Somewhat ironically, after InBev booted all Busch family members from the company after taking it over, Adolphus Busch V started his own Colorado-based vape company after working for Keef Cola.)
But it will be AB InBev’s Canadian subsidiary Labatt Breweries that will directly participate in the research and development project. Commenting on the deal, Labatt Breweries President Kyle Norrington said “Labatt is committed to staying ahead of the emerging consumer trends.”
Alcohol and Tobacco Giants Are Making Their Move
Emerging is putting it mildly. The explosive growth of the hemp CBD market, not just in the U.S. but globally, has generated an entire health and wellness industry. Today, CBD products include not just oils and tinctures but balms, cosmetics and a range of epicurean infusions. In places with adult use retail, furthermore, THC beverages are a rapidly growing segment of a market trending toward cannabis products that aren’t flower.
Alcohol and tobacco giants have taken notice of these not just emergent but full-fledged trends. But the future for these markets seems to have become seductive enough for the major companies only this year. Beverage companies and tobacco companies have been in negotiations with cannabis companies for years. This year, however, there has finally been ink on contracts. Take beer, liquor and wine company Constellation Brands—they make Corona, etc.—which invested $4 billion in Canada’s Canopy Growth Corp. in August. Or tobacco giant Altria Group Inc.—they make Marlboro, etc.—which picked up a 45 percent stake in Cronos Group.
Compared with those massive investments, AB InBev’s $50 million deal with Tilray is pocket change. But that doesn’t mean it won’t lead to a successful product launch down the line. Meanwhile, other non-alcoholic beverage companies like Coca-Cola and Pepsi are continuing to take a hard look at the market. Earlier this year, rumors circulated about a possible deal between Coca-Cola and Aurora Cannabis. But a partnership hasn’t materialized—at least not yet.