Shares of Canadian pot producer Tilray skyrocketed Thursday in premarket trading, after announcing that it was partnering with Anheuser-Busch InBev in a $100-million joint venture to research cannabis-infused non-alcoholic drinks, the companies said.
AB InBev and Tilray said they each plan to invest up to $50 million to research drinks with cannabidiol, or CBD, a component of cannabis that does not cause intoxication, and tetrahydrocannabinol, or THC, the substance that makes people high.
The alliance, which will be specific to the Canadian market, is the latest in a string of deals by global alcohol and tobacco giants in Canada's cannabis sector. It comes amid booming demand for cannabis and a long-term decline in alcohol consumption and smoking.
Canada, which became the world's first major country to fully legalize the recreational use of cannabis in October, is expected to approve cannabis-based products, including beverages and edibles in October 2019.
AB InBev's participation will be through its Labatt Breweries of Canada, which makes such brands as Labatt Blue and Budweiser.
“Labatt is committed to staying ahead of emerging consumer trends. As consumers in Canada explore THC and CBD-infused products, our innovative drive is matched only by our commitment to the highest standards of product quality and responsible marketing. We intend to develop a deeper understanding of non-alcohol beverages containing THC and CBD that will guide future decisions about potential commercial opportunities,” Kyle Norrington, president, Labatt Breweries, said Wednesday.
On Tuesday, Tilray said it will work with Sandoz AG, a unit of Swiss drug company Novartis AG, to develop and distribute medical marijuana worldwide.
Tilray is also exploring opportunities to make acquisitions in 2019, both within and outside the cannabis space, Brendan Kennedy, Tilray CEO, said.
Corona beer maker Constellation Brands added $4 billion to its $200 million investment in Canopy Growth in August to help fund the Canadian cannabis producer's global expansion.