Cannabis firm Tilray expands further into beer and buys craft brewer Montauk

USA | Canadian cannabis firm Tilray has taken another step into the US beverage alcohol sector, adding the craft brewer Montauk from metro New York to its brewery portfolio. Terms of the acquisition were not disclosed in a 7 November press release.

Founded in 2012 and located in a picturesque former woodworking building in Montauk that has a small outdoor patio and a taproom, it is hard to believe that the craft brewer is one of the top 50 US breweries by output. It only operates a 7-barrel facility, even though it is on track to sell 50,000 barrels (58,000 hl) beer this year.

Thanks to a clever business plan, which relies on contract brewing and distribution to merely two markets – New York and Long Island –, Montauk has grown to become a popular lifestyle brand in a tight market with a large population.

Tilray’s long game

This must have attracted the listed cannabis firm Tilray to Montauk. Tilray said it plans use its existing nationwide infrastructure to accelerate Montauk’s distribution and revenue growth. Eventually it hopes to turn its American alcohol brands into umbrella brands to flog cannabis products when the US government eventually legalises weed.

Montauk’s founders, Vaughan Cutillo and Eric Moss, as well as Terry Hopper, their General Manager, will stay on board after the sale.

Think geography

Much like AB-InBev before, Tilray has bought US craft beers and alcohol brands brewers with a strong regional foothold.

In late 2021, it spent reportedly USD 103 million to purchase Breckenridge Distillery in Colorado, and USD 5.1 million to buy the financially struggling Californian craft breweries Alpine and Green Flash from San Diego. In the previous year (November 2020), Tilray had acquired the 10th-largest craft brewer SweetWater in Georgia, in a deal worth about USD 300 million.

These acquisitions have provided Tilray with production sites on the East Coast, in the South, in the West and in southern California.

Selling weed under a beer label

In the event of federal cannabis legalisation, Tilray “plans to take full advantage of its strategic infrastructure, operations, and consumer loyal brands across beer, spirits, and snack-food categories to parlay into THC-based products and further expand its commercial opportunities,” the company said in its release.

Tilray has appointed veteran beer and beverage industry executive Ty Gilmore as president of Tilray’s US beer business, a newly created position. Since 2020, Mr Gilmore was Executive Vice President of the beer wholesaler Glazer’s, overseeing sales, marketing, and operations across eleven distributors in the South. Prior to that, he spent the majority of his nearly three-decades-long career at drinks company Diageo.