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Dec 20, 2018

Tilray Partners With Budweiser Maker for Cannabis Drinks

Marijuana producer Tilray Inc. (TLRY) is teaming up with the world’s largest brewer, Anheuser-Busch InBev (BUD), to research cannabis-infused non-alcoholic drinks for the Canadian market.
Both companies said in a statement that they will invest $50 million each in the joint venture. The funds will be used to study beverages with cannabidiol, or CBD, a component of cannabis that does not cause intoxication, and tetrahydrocannabinol, or THC, the substance that makes people high.
AB InBev’s Labatt Breweries of Canada, home to brands such as Labatt Blue and Budweiser, will work with Tilray’s subsidiary that specializes in developing and selling cannabis products in Canada, High Park Co., to achieve this mission. Both parties added that a decision on commercializing the beverages will be made in the future and that the partnership will be limited to Canada.
Tilray’s shares climbed 15.32% in pre-market trading.
The teaming up of Tilray and AB InBev comes ahead of an anticipated move by Canada to legalize cannabis-based edibles, drinks and vaping products next year. In October, Canada became the second country in the world after Uruguay to legalize cannabis for recreational use.
“It’s too early to know how big cannabinoid-based beverages will be but we think it’s a massive opportunity and it’s something we’re interested in investing aggressively in,” Tilray’s CEO Brendan Kennedy told Reuters on Wednesday. Kennedy added that his company plans to have the beverages ready when they become legal in Canada.
Meanwhile, Kyle Norrington, president of Labatt Breweries of Canada, said AB InBev’s decision to join forces with Tilray reflected its desire to stay on top of new consumer trends. “Labatt is committed to staying ahead of emerging consumer trends. As consumers in Canada explore THC and CBD-infused products, our innovative drive is matched only by our commitment to the highest standards of product quality and responsible marketing,” he said. “We intend to develop a deeper understanding of non-alcohol beverages containing THC and CBD that will guide future decisions about potential commercial opportunities. We look forward to learning more about these beverages and this category in the months ahead.”
Tilray and AB InBev’s partnership marks the latest in a string of deals between global alcohol and cannabis companies. Corona beer maker Constellation Brands Inc. (STZ) added $4 billion to its $200 million investment in Canopy Growth (WEED) in August.
Other deals include Molson Coors Brewing Co. (TAP) signing a joint venture with marijuana producer Hexo Corp. (HEXO) to make cannabis drinks.

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