Brewer sells its craft beer brands to cannabis company

Anheuser-Busch said this week it would sell several craft beer brands to a marijuana company, a deal experts said hinted at larger troubles inside craft brewers and beer giants alike.

The marijuana company, New York-based Tilray Brands, announced the deal on Monday, promising to reinvigorate the craft beer industry.

“Tilray is fully committed to invest in and champion the future of the U.S. craft beer industry by fueling new innovation that excites and further accelerates the growth of its consumer base,” Tilray CEO Irwin Simon said in a statement.

Benj Steinman, editor at Beer Marketer’s Insights, said the Tilray and A-B deal is an indicator that things for both the craft beer industry and A-B have become more difficult.

“It’s a different moment for craft beer,” Steinman said. “It’s not the shiny new toy, not the growth engine it once was. It’s not as attractive of a (market) segment.”

Sales of A-B products have been wavering, and the Belgium-based beer maker recently reported lower North American sales during its second quarter earnings. Craft breweries have also struggled with economic hardships and continue to grapple with postpandemic recovery efforts.

The deal, which is expected to close at the end of the year, includes Shock Top, Breckenridge Brewery, Blue Point Brewing Co., 10 Barrel Brewing Co., Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Co. and HiBall Energy.

The acquisition will move Tilray Brands, a New York-based cannabis and packaged goods company, up from the ninth-largest craft beer business in the U.S. to the fifth, according to a company statement. Terms of the agreement were not disclosed.

Anheuser-Busch’s U.S. revenue dropped by over 10% in its second quarter, following Bud Light’s declining performance since April, when the brand partnered with transgender star Dylan Mulvaney.