AB InBev and Tilray to invest $100m in non-alcoholic cannabis drinks

The world’s largest brewer, AB InBev, and Canadian cannabis company, Tilray, are to invest US$50 million each in a new research partnership to develop a “deeper understanding” of non-alcoholic beverages containing THC and CBD in order to “guide future decisions”.

The companies announced that they would each be investing $50 million in the project which will help shape any decisions “about potential commercial opportunities”.

The partnership will be limited to Canada with AB InBev subsidiary Labatt Breweries working with Tilray-owned High Park Company, which cultivates and produces a portfolio of adult-use cannabis brands.

The companies will explore the potential of using tetrahydrocannabinol (THC) and cannabidiol (CBD) in non-alcoholic drinks, something already being explored by the likes of Molson Coors, Heineken, Valiente and Rebel Coast.

AB InBev, the owner of global beer brands including Budweiser, Corona and Stella Artois, already has some interest in the sector through ownership of a 31.4% stake in the Craft Brew Alliance. Back in July it was reported by Brewbound that the Oregon-based craft brewing group would be experimenting with CBD infused beverages, as well as non-alcoholic, fermented drinks.

Labatt Breweries was founded in London, Ontario in 1847 and today has over 3,400 employees, six breweries and three craft brewers. It brews a portfolio of 60 beers for AB InBev in Canada, including Budweiser, Alexander Keith’s, Labatt Blue, Kokanee, Stella Artois and Corona.

AB InBev joins a number of other drinks companies that have already expressed interest in the sector, including Constellation Brands, which has invested heavily in Cannabis producer Canopy Growth Corp. 

Canada legalised recreational cannabis on 17 October, making it the second country after Uruguay, which passed legislation in 2013, to impose such a measure.

Customers must be 18 or over in order to purchase the drug. Cannabis possession was first criminalised in Canada in 1923, but medical marijuana has been legal in the country since 2001. It is hoped legalising the drug will raise C$400m a year in tax revenue.

In a ‘second wave of legalisations’, the Canadian federal government has stated that edibles containing cannabis and cannabis concentrates will be legally available from 17 October 2019.

Kyle Norrington, president of Labatt Breweries of Canada, said: “Labatt is committed to staying ahead of emerging consumer trends. 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. We intend to develop a deeper understanding of non-alcohol beverages containing THC and CBD that will guide future decisions about potential commercial opportunities. We look forward to learning more about these beverages and this category in the months ahead”.

Brendan Kennedy, CEO of Tilray, added: “We are delighted to be joining forces with a world-leading beverage company, AB InBev, to research how to create enjoyable cannabis beverage products. 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”.

In their joint press release, the companies stated that they believe the legal market for THC and CBD infused 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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