Cannabis and alcohol company Tilray Brands has made a widely followed list of the largest craft brewers in the United States, an apparent first for the nation’s multibillion-dollar craft brewing industry.
Tilray’s beer division ranked No. 9 on the Brewers Association’s annual report of the nation’s top craft companies based on beer sales volume in 2022.
The company landed just behind the No. 8 craft brewer, Colorado-based CanArchy – a collective that includes Oskar Blues Brewery, Cigar City Brewing and other craft producers – and just ahead of the No. 10 brewer, New York-based Brooklyn Brewery.
Tilray went on a beer-buying spree between 2020 and 2022 in a bid to diversify its business, which had been focused on the cannabis industry.
The Ontario- and New York-based firm’s beer division consists of Atlanta-based SweetWater Brewing Co., California-headquartered Alpine Beer Co. and Green Flash Brewing and New York-based Montauk Brewing Co.
In a conference call with analysts earlier this month, CEO Irwin Simon explained that Tilray built a U.S. beverage alcohol business as an adaptation strategy to cope with the “delay” in U.S. federal cannabis legalization.
When legalization does occur, he said, Tilray will be able to leverage the distribution and marketing networks of the U.S. businesses to capture new opportunities, including a broad range of cannabis-infused consumer packaged goods brands.
Tilray has said it won’t engage in plant-touching businesses in the U.S. if marijuana remains federally illegal.
“In the meantime, we are optimizing the value of our existing high-potential U.S. businesses, which consists of five craft beverage alcohol brands and wellness brands,” Simon said.
The Brewers Association, a Colorado-based trade group representing American craft brewers, this month released its annual production report for last year’s craft brewing industry.
The group will announce individual production numbers in May.
The report lists the largest 50 craft brewers among the 9,553 operating craft breweries in the U.S.
Bart Watson, chief economist at the Brewers Association, told MJBizDaily via email he believes it’s the first time any cannabis company has appeared on the list.
“I think it shows that craft brewing is still an attractive investment with strong brands,” he wrote.
“There’s a reason Tilray is choosing to invest here as opposed to other sectors. I also think it points to some overlaps in regulated sectors, though I wouldn’t go far in comparing the markets for beverage alcohol and cannabis.”
Ty Gilmore, president of U.S. Beer for Tilray, said in a news release that his division “… has enormous potential to grow even further as we continue to expand our distribution network into new markets across the U.S. and grow our leading portfolio of diverse craft brands that resonate with adult consumers.”
The Brewers Association defines craft brewer as a small and independent brewer with annual production of 6 million barrels of beer or less.
“Independent” means less than 25% of the craft brewery is owned or controlled by a beverage alcohol industry member that is not itself a craft brewer.
Based on sales, the U.S. cannabis industry now exceeds the nation’s craft beer sector.
According to the recently released 2023 MJBiz Factbook, legal U.S. marijuana sales last year totaled an estimated $23.9 billon-$30 billion – eclipsing craft beer sales, which totaled $7.9 billion.
For the three-month period ended Feb. 28, Tilray’s net beverage alcohol revenue – including whiskey – rose 5% over the same period one year earlier, to $20.6 million.
Tilray’s foray into the craft brewing industry started with the company’s purchase of SweetWater for about $300 million.
Tilray then quietly acquired two California craft beer brands in late 2021, Alpine and Green Flash, in a cash-and-stock deal worth $5.1 million.
Montauk was acquired for an undisclosed sum late last year.
Tilray shares trade as TLRY on the Nasdaq and Toronto Stock Exchange. (Full Story)