Tilray Acquires Breckenridge Distillery, Expands Product Portfolio, and Fortifies Its Position in the U.S.
Tilray, Inc. (NASDAQ: TLRY; TSX: TLRY), a global cannabis-lifestyle and packaged goods company, today announced its acquisition of Breckenridge Distillery, a leading distilled spirits platform located in Breckenridge, Colorado.
Breckenridge Distillery is among the largest marketers of whiskey in the United States and is well-known for its craft spirits and award-winning bourbon whiskey. Tilray expects the acquisition to be immediately accretive to EBITDA.
Tilray, Inc. is a leading global cannabis-lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America. The company is focused on improving people’s lives by inspiring and empowering the global community to improve their lives by providing them with products that enhance the strength of their minds, body, and soul.
Tilray’s mission is to provide its patients and consumers a cultivated experience and health and wellbeing through high-quality and innovative products. Tilray is a pioneer in cannabis research, cultivation, and distribution, and its production platform supports more than 20 brands in over 20 countries. The company’s product range includes hemp-based foods and alcoholic beverages.
About the Acquisition
Irwin D. Simon, Chairman, and CEO of Tilray said that Tilray’s strength lay in the ability of its team to identify and expand leading CPG lifestyle brands that resonate powerfully with consumers. He also said that Breckenridge Distillery was an iconic addition to the company’s platform in this respect, based on its portfolio of award-winning spirits, passionate consumer engagement, and a strong sales and distribution network.
He added that Tilray’s management saw tremendous potential for the company’s existing SweetWater brand and Breckenridge to complement each other, thereby expanding their reach and ensuring profitable growth in the company’s beverage alcohol segment.
Mr. Simon added that the Breckenridge Distillery transaction was consistent with Tilray’s strategy of leveraging its growing portfolio of U.S. CPG brands to launch THC-based product adjacencies upon its federal legalization in the U.S.
According to him, the diversified revenue streams were important for meeting the company’s ultimate aim of becoming an industry leader, with $4 billion in revenue by the end of the financial year 2024.
Bryan Nolt, Breckenridge Distillery’s Founder and CEO, said that his company was excited to join Tilray and drive revenue growth as part of Tilray’s global and leading CPG and cannabis-lifestyle platform.
According to him, the award-winning spirits that had driven Breckenridge’s success would unquestionably benefit from access to Tilray’s global distribution network and opportunities to expand into cannabis and edible-related products in the U.S.
The Breckenridge Distillery was founded in 2008 by Mr. Nolt and is best-known for its blended bourbon whiskey, a high-rye mash American-style whiskey, and a collection of artisanal spirits. Breckenridge Distillery’s consumer engagement strategy is defined by experiential marketing and highly-effective social media outreach.
This strategy includes its partnership with the Denver Broncos that led to it becoming the Hometown Bourbon Whiskey of the Denver Broncos. Breckenridge’s blended bourbon whiskey is a winner of Best American Blended Whiskey in 4 categories in the World Whiskies Awards, and in 2018 it was awarded the prestigious Icons of Whisky award for Brand Innovator of the Year by Whisky Magazine.
Strategic and Financial Benefits
The acquisition of Breckenridge provides Tilray with a strong brand and accretive business. Besides that, the possession increases its range of beverage alcohol products. Further, Tilray will have better infrastructure and a larger footprint in the U.S. market once cannabis is legalized by the federal government.
Other possible financial and strategic benefits are the following:
Breckenridge Distillery joins SweetWater Brewing Company as the cornerstones of Tilray’s beverage alcohol segment and further diversifies the company’s net revenue mix. Breckenridge is expected to immediately margin accretive by generating adjusted EBITDA margins of approximately 25%.
Provides for Additional Innovation Opportunities
Tilray believes the acquisition of Breckenridge would enable it to commercialize innovative products through the development of non-alcoholic distilled spirits, including bourbon whisky infused with cannabis, once it is federally allowed.
Opportunity for Accelerated Growth of Breckenridge Distillery
With more than 85% of its revenue generated in Colorado, Breckenridge Distillery has enormous potential to expand its customer base and grow throughout the U.S. as a national brand. To that end, Tilray intends to leverage SweetWater’s existing nationwide infrastructure to accelerate Breckenridge’s consumer awareness and create new products.