Tilray (TSX: TLRY) evidently can’t decide if it wants to be a cannabis firm, or a beverage alcohol company. The firm this morning announced it will be acquiring Breckenridge Distillery, a distilled spirits firm based in Colorado.
Breckenridge is said to be heavily focused on both bourbon whisky as well as craft spirits, which it brings to consumers via “experiential marketing” and “highly effective social media outreach.”
While the deal is said to be immediately accretive to EBITDA, financial details of the transaction were not provided, nor were financial details of the firm. The most disclosed in this arena is that adjusted EBITDA margins are currently at 25%.
The transaction was attempted to be framed by Tilray CEO Irwin Simon as a transaction that will be used to leverage CPG brands into the THC-based product space upon US federal legalization. Further, the company attempted to claim the transaction will provide Tilray with “a larger footprint in the U.S. market upon federal cannabis legalization.”
This “larger footprint” is expected to be delivered via non-alcoholic distilled spirits that are instead infused with cannabis, which is said to include bourbon whiskey.
Lastly, the company intends to grow the brand into a “true national brand,” with just 15% of the firms revenue generated outside of the state of Colorado currently. This is expected to be done via the firms SweetWater nationwide infrastructure.
Tilray last traded at $11.94 on the TSX.
Information for this briefing was found via Edgar and Tilray. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.