Aphria, a Canadian cannabis company, plans to acquire Atlanta’s Sweetwater Brewing Co., which is known for its “420” beer. The $300 million deal is the latest hook-up between the alcoholic beverage and pot industries, and it may be another bit of evidence suggesting companies think there’s a positive outlook for the cannabis food and beverage industry.
Although Sweetwater’s beer doesn’t currently contain cannabis, it reportedly tastes and smells like pot. And Sweetwater has a report with cannabis-lifestyle consumers.
Furthermore, MarketWatch said statements surrounding the pending deal suggest that the companies may have plans for some new recipes.
“Our 420 brand offerings…complement Aphria’s cannabis business and create mutual opportunities for accelerated expansion into other cannabis- and beverage-related products in the U.S. and Canada,” Sweetwater founder and Chief Executive Freddy Bensch said.
And Aphria’s CEO, Irwin Simon, noted that Sweetwater’s “platform of craft-brewing innovation” is one of the attractive elements that will help the cannabis company establish and grow it’s U.S. presence.
The U.S. is becoming more marijuana-friendly with Arizona, New Jersey and Montana legalizing pot for recreational use during this election cycle. South Dakotans voted to give cannabis the greenlight for both recreation and medical use.
And while it’s still illegal at the federal level, according to Investors.com, the Biden-Harris campaign has already vowed to decriminalize marijuana and expunge related convictions. Further, former vice president Joe Biden has expressed support for states making their own cannabis rules.
“Nationwide decriminalization would put the U.S. pot industry one step closer to nationwide legalization, which would allow Canada’s weed companies — waiting for the laws here to open up — to expand more business southward, Investors.com added.
Other cross-border deals have positioned companies to take advantage of shifting tides in U.S. marijuana regulations.
Take beer, wine, and spirits producer Constellation Brands, and its heavy investment in Canopy Growth, a multi-faceted cannabis company based in Ontario. The two companies have worked together on developing and manufacturing cannabis drinks for the Canadian market.
Then there’s Molson Coors and the joint venture it developed with Hexo Corp., a Canadian company that produces, markets and sells cannabis. These two companies partnered to launch the Veryvell line of water-soluble cannabis extract drops for the Canadian market. This year, they announced plans to research and develop non-alcoholic CBD beverages in Colorado, reported Money & Markets.
If these companies or others bring cannabis products to market in the U.S., the outlook seems positive.
Even with pot only legal in certain states, the market for cannabis-infused products is projected to approach $3 billion in the U.S. this year, according to New Frontier Data. Infused-products already represent 14% of sales, and the firm found that alternative ways to consume cannabis beyond combustibles has gained popularity during the pandemic, PreparedFoods reported.
If Aphria is eyeing the U.S. cannabis product market, its pending acquisition will deliver another asset that’s attractive for catering to the pot crowd—the Sweetwater 420 Fest—a music festival that’s held annually in Atlanta around April 20, which is considered a marijuana holiday