(This story has been updated to include the value of the acquisition.)
Canadian marijuana producer Tilray has taken another step into the U.S. alcohol industry by acquiring Colorado-based Breckenridge Distillery, with plans to launch cannabis-infused whiskey.
The deal is worth $102.9 million, paid for by issuing 11,245,511 Tilray shares, according to a regulatory filing.
The acquisition follows Aphria’s 2020 acquisition of U.S. craft brewer SweetWater Brewing Co. before Aphria and Tilray announced their merger later that year.
“We see tremendous potential for Breckenridge and our existing SweetWater brand to complement each other, expanding their respective reach and driving further profitable growth in our beverage alcohol segment,” Tilray CEO Irwin Simon said in a Wednesday news release.
Simon added that the acquisition of the Breckenridge-based distillery “is consistent with Tilray’s strategy of leveraging our growing portfolio of U.S. CPG brands to launch THC-based product adjacencies upon federal legalization in the U.S.”
Specifically, Tilray believes the acquisition will lead to the commercialization of “new and innovative products through the development of non-alcoholic distilled spirits, including bourbon whisky, that is infused with cannabis,” according to the release.
More than 85% of Breckenridge’s revenue comes from Colorado, Tilray said.
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Tilray said it plans “to leverage SweetWater’s existing nationwide infrastructure to … create new, greatly-expanded consumer awareness and product adoption.”
Beverage alcohol revenue comprised $15.5 million of Tilray’s revenue in the company’s most recent quarter, or about 9% of total revenue.
Tilray shares trade as TLRY on the Nasdaq and the Toronto Stock Exchange.