AB InBev joins pot industry with Tilray Beverage partnership

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CanadaIndustryHealth Canada Proposes Regulations for Edibles Extracts and Topicals Liora Ipsum

The maker of Budweiser is partnering with medical cannabis company Tilray in a US$100 million ($147.5m) deal to research cannabis-infused drinks for the Canadian market.

Coca-Cola, Pepsi and Guinness brewer Diageo have said they are closely watching the market for cannabis as it evolves. Decisions about commercialisation will be made later, as marijuana edibles and beverages won't be legal in Canada until next year.

"We intend to develop a deeper understanding of non-alcohol beverages containing THC and CBD that will guide future decisions about potential commercial opportunities", Kyle Norrington, president of Labatt Breweries, stated in a press release. THC is the ingredient in cannabis that makes you high.

Tilray is also exploring opportunities to make acquisitions in 2019, both within and outside the cannabis space, Brendan Kennedy, Tilray CEO, said. "Anheuser-Busch InBev produces and distributes numerous world's most iconic beverages and they seemed like an ideal partner for us". Canopy Growth (CGC), another Canadian marijuana business, received a multibillion dollar investment from Corona owner Constellation Brands (STZ) in August.

In a more modest deal that same month, Molson Coors, the second biggest beer maker in North America, struck a Canadian joint venture with marijuana producer Hexo to make cannabis drinks.

The value of venture capital deals in the USA marijuana industry more than doubled this year compared to 2017, according to data from Pitchbook, and private equity investments in cannabis increased by more than one-third.

The regulations covering the wave of new products must be in place by October 2019.

Health Canada
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Meanwhile, shares of A-B InBev stock were up only slightly over its closing price of $68.80.

TORONTO, CANADA - December 19, 2018 - Today, AB InBev, the world's leading brewer, and Tilray, a global pioneer in cannabis production and distribution, announced a partnership to research non-alcohol beverages containing tetrahydrocannabinol (THC) and cannabidiol (CBD).

"Labatt is committed to staying ahead of emerging consumer trends".

Health Canada's proposed regulations for cannabis edibles, extracts and topicals limits the amount of psychoactive THC per package, restricts products appealing to young people, and mandates child-resistant packages and warning labels.

Tilray and AB InBev said they'll conduct their product development at the beverage company's Labatt Breweries subsidiary in Ontario.

With strong track records of responsible product development and marketing in their respective industries, AB InBev and Tilray believe that the legal market for THC and CBD beverages will only thrive if the industry embraces appropriate regulation of adult-use cannabis, including responsible production, marketing, sale and consumption.

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