Budweiser maker teams up with Tilray to explore pot drinks

JSE:ANH 20 December

JSE:ANH 20 December

Coca-Cola, Pepsi and Guinness brewer Diageo have said they are closely watching the market for cannabis as it evolves. The arrangement is limited to Canada. "Anheuser-Busch InBev produces and distributes numerous world's most iconic beverages and they seemed like an ideal partner for us".

For now, AB InBev is only looking at using cannabis ingredients in Canada.

Constellation Brands has invested more than $4 billion into Canada's Canopy Growth Corporation, acquiring a 38 percent stake in the process. Denver brewer Molson Coors, meanwhile, announced a joint venture with The Hydropothecary Corporation, a Canadian cannabis producer, and Marlboro maker Altria said it would invest $1.8 billion in Toronto-based Cronos Group. That JV is structured as a standalone startup company led by its own board and management team.

The value of venture capital deals in the US 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. Such products are not expected to be legalized until the end of 2019 at the earliest.

After closing Wednesday at $71, Tilray stock passed $80 in after-hours trading. Shares in AB InBev, by contrast, have fallen 34% this year.

The companies used the word "responsible" eight times in their press release and said that they'd decide whether to commercialize any resulting beverages sometime in the future.

A bottle of Durban Poison Cannabis Lager (supplied
A bottle of Durban Poison Cannabis Lager

The Canadian marijuana company Tilray announced yesterday (December 18) that it has signed an agreement to partner with Novartis subsidiary Sandoz to sell medical marijuana in countries where it is legal, now numbering 35.

British Columbia-based Tilray has products available in 12 countries and operations in Australia, New Zealand, Canada, Germany, Latin America and Portugal. Each company intends to invest up to $50 million Dollars, for a total of up to $100 million USD. 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.

The deal does not address future decisions about the commercialization and sale of a potential cannabis drink.

There are no legal cannabis beverages now on the market, as the sale of cannabis edibles - including drinks - remains illegal in Canada. "Tilray and AB InBev share a commitment to responsible product development and marketing, and we look forward to beginning our work on this important partnership as Tilray continues to pioneer the development of a professional, transparent, and well-regulated cannabis industry", said Brendan Kennedy, CEO of Tilray.

AB InBev said the research partnership combines its "deep experience in beverages with Tilray's expertise in cannabis products", in a statement on Thursday.

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