Anheuser-Busch InBev is partnering Canadian marijuana firm Tilray.
Anheuser-Busch InBev is partnering Canadian marijuana firm Tilray.
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SAB owner Anheuser-Busch InBev has joined the growing ranks of alcohol giants dipping their toes into the cannabis industry through a research partnership with Canadian pot firm Tilray.

The two companies said on Wednesday they will jointly conduct research into non-alcoholic, cannabis-infused beverages. Each company will invest up to $50m in the partnership, which is limited to Canada. Decisions about commercialisation will be made later, as marijuana edibles and beverages won’t be legal in Canada until 2019.

Tilray shares jumped 16% in post-market trading on Wednesday, while AB InBev was down as much as 1.8% early on Thursday in Brussels, in a generally lower market.

AB InBev is the third alcohol company to partner or invest in a Canadian marijuana producer after the country became the first major economy to legalise marijuana in October. Molson Coors Brewing Company signed a joint venture with Hexo Corporation, while Constellation Brands is now the biggest shareholder in Canopy Growth Corporation. Tobacco company Altria Group also announced a $1.8bn investment in Cronos Group this month.

Unlike the Constellation and Altria deals, both of which include the option to take majority control in the future, Tilray want to remain independent, said CEO Brendan Kennedy.

“We want to control our own destiny,” he said. “We haven’t sold our company to anyone, we’re not looking to get bought or acquired.”

Keeping it under wraps

Tilray and AB InBev have been in talks for a year, making the deal potentially one of the best-kept secrets in the rumour-saturated marijuana industry, Kennedy said. AB InBev, based in Leuven, Belgium, is the world’s biggest brewer, with brands including Beck’s and Bud Light.

“We’ve met in Seattle, Denver, New York, Toronto, and Nanaimo, British Columbia to discuss the terms of this agreement and the more we’ve gotten to know them, we realised that we have a shared vision and values,” Kennedy said. “Anheuser-Busch InBev produces and distributes many of the world’s most iconic beverages and they seemed like an ideal partner for us.”

The partnership is the second announced by Tilray this week. On Tuesday, the firm said it has reached an agreement with a division of Swiss drug giant Novartis to develop and distribute medical marijuana in legal jurisdictions around the world, sending its shares up 16%. Tilray has jumped more than four-fold since it went public in July, and is the second-largest cannabis company by market value. Shares in AB InBev, by contrast, have fallen 36% this year.

The research will be conducted at Tilray’s High Park processing facility in London, Ontario, where AB InBev subsidiary Labatt Breweries of Canada has a large plant. Kennedy said the $100m investment by the two companies will create jobs in the city, about 200km southwest of Toronto, though the exact number is to be determined. The research will focus on drinks infused with tetrahydrocannabinol that would get users high and the non-intoxicating cannabidiol.

Tilray, based on Vancouver Island, is confident it’s already solved several of the problems that have slowed development and consumer adoption of cannabis-infused beverages, including water solubility and flavour.

“The one core focus will be creating beverages that we think will delight consumers,” Kennedy said.

Bloomberg