Cannabis Company Tilray Brands Acquires Eight Craft Breweries, Including Breckenridge, for $85 Million

On August 7, Tilray Brands announced that it had agreed to purchase eight beer and beverage brands from Anheuser-Busch for a reported $85 million. Included in those eight is Colorado’s Breckenridge Brewery, with its twelve-acre Farm House location in Littleton, as well as its iconic brewpub in Breckenridge.

With the move, Tilray, an international cannabis-lifestyle and consumer packaged goods company with a $2 billion market cap, has drastically increased its alcohol holdings. The company says that the move should roughly triple its beer business, from 4,000,000 cases currently sold per year to about 12,000,000.

Tilray already owns SweetWater Brewing Company, Montauk Brewing Company, Alpine Beer Company and Green Flash Brewing Company. With the Anheuser-Busch deal, Tilray is adding Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company and HiBall Energy.

Tilray also purchased Breckenridge Distillery (unrelated to Breckenridge Brewery) in December 2021 for just over $100 million. The company also opened a SweetWater Brewing outpost in the former Red Truck Beer Company location in Fort Collins in late 2021.
The Anheuser-Busch move seemed to surprise both the beer and cannabis industries, though Tilray has consistently and aggressively invested in craft beer in recent years, and shows no signs of stopping.

Tilray’s stock has struggled over the past few years, as Canadian cannabis competition has increased and the United States regulation progress has decreased. Many analysts believe that Tilray is focused on the bigger picture of positioning itself as a supplier of cannabis products, including beverages, to a national U.S. market, if and when that should ever become legal.

Despite the projected sales increase, the move doesn’t come without risks. Beyond the inherent challenges of an $85 million deal, many of the acquired brands have been in decline in recent years. Whether that's because of Anheuser-Busch losing interest in craft beer or a general fading consumer interest, time will tell — but SweetWater hopes to reverse the trend. With these acquisitions, Tilray has immediately expanded its production capacity and distribution footprint.
The company is also taking over eight brewpub locations, including the longstanding Breckenridge brewpub in its namesake mountain town, in addition to the larger packaging facility, restaurant and brewery in Littleton. Brewpub locations in New York, Idaho, Oregon and Washington were also acquired.

Breckenridge and the Wynkoop Group — which owns the flagship Wynkoop Brewing Co. as well as several restaurants, including the Cherry Cricket — had come together in a joint venture in 2010. Together they built the Farm House, then sold that along with the original Breckenridge Brewery to Anheuser-Busch in 2015 as part of that company's jump into craft beer, which included the acquisition of Goose Island, Karbach, Wicked Weed, Elysian and Golden Road. The restaurants and bars in the Wynkoop Group were not part of the Tilray deal.

The Anheuser-Busch craft beer portfolio, while large by craft standards, represents a small amount of the overall company. That craft portfolio has been struggling lately — layoffs happened earlier this year, and insiders have been predicting for months that the company is looking to divest its craft beer holdings.

With this transaction, Breckenridge is likely to return to the “craft” designation monitored by the Boulder-based Brewers Association, the largest trade group to represent the industry. While its definition of "craft" disallows non-craft beverage alcohol industry members that control over 25 percent of a company, the rules allow for outside companies that are unrelated to alcohol to control the craft breweries. The practical effect of these rules means that companies like Boston Beer (now owned by Sam Adams) remain craft breweries, while breweries like New Belgium (purchased by Kirin in 2019) are not.