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Let’s be frank, Molson Coors wouldn’t be offloading these brands if craft beer sales weren’t slowing and they were profit centers…but they’re not.
And if you think that this sale isn’t an omen that should concern every craft brewer, you’re kidding yourself.
On August 13, Tilray Brands, a Canadian cannabis company that has been buying up American craft breweries, announced that it had reached “a definitive agreement” with Molson Coors Beverage Company to acquire four craft beer brands, a transaction expected to close later this month.
The acquisition includes:
- Hop Valley Brewing Company (Eugene, Oregon)
- Terrapin Beer Co. (Athens, Georgia)
- Revolver Brewing (Granbury, Texas)
- And Atwater Brewery (Detroit, Michigan)
In 2023 the global cannabis-lifestyle and consumer packaged goods company, acquired eight beer and beverage brands from Anheuser-Busch including Shock Top; Breckenridge Brewery; Blue Point Brewing Company; 10 Barrel Brewing Company; Redhook Brewery and Widmer Brothers Brewing.
That all-cash transaction which included current employees at that time, and breweries and brewpubs associated with those brands, was rumored to be around $85 million, according to a filing made with the Securities and Exchange Commission.
Once Tilray’s deal with Molson Coors closes, the company will add six new US breweries to its holdings and 20 craft breweries overall, with the combined capability of producing more than 1 million barrels of beer annually.
It might strike some as odd, that the largest cannabis producer in the world is investing so much capital into the craft beer biz at a time when the industry is slowing, unless you’re thinking strategically and looking towards the future. A future where recreational cannabis is legal nationally and Tilray can start producing cannabis-infused brews…And its latest four property acquisition only furthers that goal.
This journey started when Aphria Inc., a Canadian pot-producer, purchased SweetWater Brewing in 2020.
It was a $300 million transaction involving both stock and cash, which gave Aphria, a publicly traded company, entry into the US market and the infrastructure to advance its cannabis business as state laws evolved.
Two weeks after closing on the acquisition of Atlanta’s Sweetwater Brewing, Aphria reached an agreement to merge with Tilray, a Canadian pharmaceutical and cannabis company forming the world’s largest cannabis company valued at $3.8 billion at that time.
On July 21, 2021 the now Tilray-owned SweetWater Brewing announced that it had expanded its reach to Colorado, where recreational cannabis has long been legal, with a new brewery in Fort Collins and a taproom at Denver International Airport.
Then in December SweetWater Brewing announced that it was acquiring San Diego, California-based Green Flash Brewing and Alpine Beer, both companies that have seen better days.
In November of 2022, Tilray acquired Montauk Brewing Company followed by the eight property deal it made with AB InBev in August of 2023.
And once its transaction with Molson Coors closes in August, Tilray will become the #4 craft brewer in the US, according to the Bouder-based craft beer advocacy not-for-profit, Brewers Association’s definition.
So what does this latest acquisition tell us about the current state of craft beer in the US?
It’s not good.
The craft beer industry has matured, national sales are slowing, and the majors want out of the biz.
In the wake of the Bud Light trans fiasco, Molson Coors has been on a roll oand they are tightening things down for the future by offloading four craft breweries that they’d lost interest in, just as consumers appear to be losing interest in craft beer nationally.
