The deal is part of a Tilray diversification effort that began with its purchase of rival Aphria in 2021. Aphria bought the parent of Sweetwater Brewing of Atlanta in 2020.
The news pleased Tilray investors, who sent the stock up almost 12% overnight. TLRY stock opened at $2.47 per share, a market capitalization of over $1.6 billion. Brands moving in the deal include Shock Top, Red Hook, and Widmer Brothers.
BUD stock fell 1% overnight. It opened at $55.92 and has a market cap of $98 billion.
Beer Me, Please
While The Wall Street Journal focused on AB InBev and its problems with Bud Light, the deal is part of a continuing trend for both sides.
Big beer companies have been shedding small brands to concentrate on those with the biggest sales. Constellation Brands (NYSE:STZ), which sells $6 billion worth of beer a year and owns Modelo, now the best-selling beer in the U.S., recently sold its craft beer brands back to their former owners.
Tilray, meanwhile, has been beefing up its presence in beer while it consolidates the cannabis business, which has proven smaller than previously thought. In addition to Aphria’s brands, Tilray now owns Montauk Brewing, New York’s largest craft brewer.
Tilray expects its beer sales to triple as a result of the deal to 12 million cases. It had $32.4 million in beer sales during its most recent quarter. The Bud deal could make its beer business larger than its cannabis business.
TLRY Stock: What Happens Next?
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.