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Anheuser's Labatt, Tilray's High Park Farms To Research Non-Alcoholic THC, CBD Beverages

December 19, 2018 5:40 pm
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Anheuser's Labatt, Tilray's High Park Farms To Research Non-Alcoholic THC, CBD Beverages

Tilray Inc (NASDAQ:TLRY)'s stock surged 14 percent in after-hours trading on the back of the announcement it's going to partner with Anheuser Busch Inbev NV (NYSE:BUD).

What Happened

Tilray will participate in the partnership through its High Park Company subsidiary, while Anheuser Busch Inbev's involvement will be through its subsidiary Labatt Breweries of Canada. Both companies will research non-alcohol beverages that contain tetrahydrocannabinol (THC) and cannabidiol (CBD).

Each company will invest up to $50 million in the partnership.

Why It's Important

Despite the full legalization of marijuana in Canada, edibles and beverages are expected to be allowed to appear on the shelves sometime next year. In the meantime, a number of beer companies have rolled into the industry and forged partnerships.

Molson Coors Brewing Co (NYSE:TAP) estimated the size of the Canada cannabis drinks market at $3 billion; The company has formed a joint venture with Hexo Corp (OTC:HYYDF) to develop cannabis-infused beverages. 

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In a similar fashion, Constellation Brands, Inc. (NYSE:STZ) has amassed a more than 50 percent stake in Canopy Growth Corp (NYSE:CGC). 

In this way, for Tilray securing a partnership with the largest brewer in the world represents a major milestone for the company that will eventually open up many opportunities in terms of new products.

The companies have not announced a timeline for their new partnership. The partnership will only involve the Canadian market and will be focused on research only, at least at the beginning. The decision to sell the beverages will be made in the future.

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Photo credit: opacity, Flickr