Tilray (NASDAQ:TLRY) announced their research partnership with Anheuser-Busch InBev (NYSE:BUD) earlier this month. Together, the pot stock and the multinational drink and brewery company will research new non-alcoholic marijuana-infused beverages for the future market. The research partnership will combine AB InBev’s beverage expertise with Tilray’s experience in the cannabis sphere.
The partnership will take place between subsidiaries of both companies. AB InBev will be working with High Park Company, one of Tilray’s adult-use cannabis brands, through their leading Canadian brewery, Labatt Breweries. Each company will be investing $50 million into the research, noting in the press release that this research is necessary if the beverage industry wants to thrive in the legal cannabis market.
“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,” Tilray CEO Brendan Kennedy clarified in the company’s press release dated December 19.
Happy Winter Solstice! From now until June 21, 2019, the days will continue get brighter! If you have been struggling with Seasonal Affective Disorder (SAD), from a lack of daylight, you’re not alone. https://t.co/D35wR2Wbuc
— Tilray (@tilray) December 21, 2018
Cannabis and the beverage industry have a good thing brewing
Since Constellation Brands invested in Canopy Growth over the summer, the market’s fascination with the beverage industry has not faded. Cannabis-infused beverages are slowly but surely becoming a mainstay in the legal cannabis industry. According to analysts at Canaccord Genuity, the market for infused beverages is projected to grow to $600 million over the next three years. And with beverages being only one part of a global industry that is already worth over $9 billion, it should come as no surprise that AB InBev was the next big name in beverages to add cannabis to their portfolio.
Some cannabis investors may note that AB InBev was previously on the fence about investing in cannabis earlier this year. In a June interview with Just-Drinks, AB InBev CEO Carlos Brito said that cannabis was something the company was keen on learning more about, but “for now we don’t feel we need to do anything.” Barely six months later, the beverage giant is singing a different tune.
It seems that the capriciousness of the cannabis market does not stop at the pot stocks. As the world’s attitude toward marijuana and marijuana-infused products starts to evolve, so too do the corporations’. Perhaps the higher price point of infused products changed the minds of the AB InBev board, or maybe it was Canaccord Genuity’s most recent announcement. Analysts are not quite sure, but what is for certain is that this research partnership between Tilray and AB InBev comes at a time when the Canadian market, in particular, is still waiting on the legalization of infused beverages.
By focusing primarily on research, Tilray could be situating themselves at the forefront of a brand new infused beverage market in Canada. Regulations for the legal recreational market are still in their infancy in North America, but Tilray’s preemptive focus on the research and development of an untapped infused beverage market could very well put them a head above the competition.
This partnership may also come as a relief to some investors who are waiting on the fallout from Tilray’s IPO expiration. The expiration date of January 15 is fast approaching, and the threat of dilution and panicked selling has not gone unnoticed. Tilray’s research partnership with AB InBev will not stop the effects of their IPO expiration, but it does give cannabis investors an optimistic look into the future potential of this market. As soon as the dust starts to settle around the new year’s big changes, pot stocks like Tilray could have more surprises up their sleeves.
*Header Image: Pp391