Global beer giant Anheuser-Busch InBev has announced a $100 million research partnership with Tilray, a worldwide pioneer in cannabis production and distribution.
The partnership – limited to Canada – will research non-alcoholic beverages containing tetrahydrocannabinol (THC) and cannabidiol (CBD). “Decisions regarding commercialization of the drinks will be made in the future,” AB InBev said.
Although the initial investment is relatively small (each company plans to invest up to $50 million) and the likelihood of a full-scale roll-out unclear, industry insiders believe it is a sensible move by AB InBev given the potential market for cannabis-infused drinks, especially in the US.
AB InBev will participate in the partnership through its subsidiary Labatt Breweries of Canada, while Tilray will participate via its Canadian adult-use cannabis subsidiary High Park Company, which develops, sells and distributes a portfolio of socially responsible cannabis brands and products in Canada.
Brendan Kennedy, chief executive of Tilray, said: “We are delighted to be joining forces with a world-leading beverage company, AB InBev, to research how to create enjoyable cannabis beverage products.”
Kyle Norrington, president of Labatt Breweries of Canada, noted: “We intend to develop a deeper understanding of non-alcoholic beverages containing THC and CBD that will guide future decisions about potential commercial opportunities.”
Emerging markets move?
AB InBev owns more than 500 beer brands including Budweiser, Corona, Stella Artois, Jupiler, Hoegaarden and Leffe, and consolidated its market-leading position by acquiring SABMiller, which gave it better market penetration into Latin America and Asia as well as bigger footprint in Africa. AB InBev predicts beer volumes to rise by nearly 50 percent in those regions by 2025, though this could be negatively affected by a global economic slowdown, insiders said. Meanwhile, beer volumes in developed markets remains sluggish, they explained.
AB InBev also has significant premium penetration in China, with profit margins more than five times the mass-market beer average, the insiders added. The group’s controlling shareholder is 3G Capital, the Brazilian private equity vehicle which has gained majority positions in leading consumer goods companies.
Tilray is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids serving tens of thousands of patients in 12 countries across five continents.