Aphria CEO Irwin Simon is Bullish on Cannabis Drinks


sweetwater-420-strain

Aphria chairman and CEO Irwin Simon believes that beverages will become one of the biggest segments in the cannabis industry once adult-use marijuana is federally legalized in the U.S.

In a conversation with THCnet, Simon explained his bullishness on the cannabis-infused drinks segment and shared why his company agreed to acquire Atlanta-based craft beer maker Sweetwater Brewing for $300 million — a deal that caught those in both the beer and cannabis industries by surprise.

Major alcohol players like Anheuser-Busch InBev (Tilray), Constellation Brands (Canopy Growth), and Molson Coors (Hexo) have made significant investments into Canadian cannabis firms, while companies like Heineken-owned Lagunitas (Hi-Fi Hops) and Pabst Brewing (Pabst Labs) have also dipped their toes into the cannabis drinks space with partnerships and licensing deals.

However, it is believed that Aphria’s deal to acquire a U.S. craft beer company is a first of its kind — one that brings a U.S. alcohol manufacturer and a Canadian cannabis firm together under one roof.

Though unique, the partnership represents a natural evolution of Aphria’s business model, according to Simon.

“We have always considered ourselves as a CPG company with a focus around building our consumer brands like any company that sells baking mixes or snack brands,” he said.

And now that Aphria has access to a profitable beer company with years of brewing expertise, as well as valuable cannabis-themed brands like 420 Extra Pale Ale, Hydroponics Seltzer, and its G13 IPA infused with terpenes, Simon believes there’s reason to be bullish on the future of cannabis-infused beverages.

“I am betting that it will be as big as White Claw and Truly,” he said.

That probably seems hard to imagine now, and for good reason. Sales of hard seltzer — which currently make up roughly 10% of total U.S. “beer” volume — topped $3.3 billion through the first 9.5 months of 2020. Analysts at Credit Suisse estimate the category will grow to account for 25% of total beer volume by 2025.

If that forecast proves accurate, our back-of-the-envelope calculation puts the hard seltzer category somewhere north of $10 billion by 2025.

But sales of cannabis drinks in the U.S. are nowhere near that at the moment.

While several emerging CBD-infused drinks companies like Mad Tasty and Recess are beginning to build a category of hemp-derived beverage offerings that can be sold at mainstream retail outlets, the market for THC-infused beverages that get consumers high is still nascent.

The largest producer in California, Cann, has raised $5 million from an impressive roster of well-known celebrities, but even that company will only move about 3.5 million units this year.

Other brands like Wunder and Two Roots are also making headway, but without the ability to sell THC-infused…



Read MoreAphria CEO Irwin Simon is Bullish on Cannabis Drinks

Aphria CEO Irwin Simon is Bullish on Cannabis Drinks


sweetwater-420-strain

Aphria chairman and CEO Irwin Simon believes that beverages will become one of the biggest segments in the cannabis industry once adult-use marijuana is federally legalized in the U.S.

In a conversation with THCnet, Simon explained his bullishness on the cannabis-infused drinks segment and shared why his company agreed to acquire Atlanta-based craft beer maker Sweetwater Brewing for $300 million — a deal that caught those in both the beer and cannabis industries by surprise.

Major alcohol players like Anheuser-Busch InBev (Tilray), Constellation Brands (Canopy Growth), and Molson Coors (Hexo) have made significant investments into Canadian cannabis firms, while companies like Heineken-owned Lagunitas (Hi-Fi Hops) and Pabst Brewing (Pabst Labs) have also dipped their toes into the cannabis drinks space with partnerships and licensing deals.

However, it is believed that Aphria’s deal to acquire a U.S. craft beer company is a first of its kind — one that brings a U.S. alcohol manufacturer and a Canadian cannabis firm together under one roof.

Though unique, the partnership represents a natural evolution of Aphria’s business model, according to Simon.

“We have always considered ourselves as a CPG company with a focus around building our consumer brands like any company that sells baking mixes or snack brands,” he said.

And now that Aphria has access to a profitable beer company with years of brewing expertise, as well as valuable cannabis-themed brands like 420 Extra Pale Ale, Hydroponics Seltzer, and its G13 IPA infused with terpenes, Simon believes there’s reason to be bullish on the future of cannabis-infused beverages.

“I am betting that it will be as big as White Claw and Truly,” he said.

That probably seems hard to imagine now, and for good reason. Sales of hard seltzer — which currently make up roughly 10% of total U.S. “beer” volume — topped $3.3 billion through the first 9.5 months of 2020. Analysts at Credit Suisse estimate the category will grow to account for 25% of total beer volume by 2025.

If that forecast proves accurate, our back-of-the-envelope calculation puts the hard seltzer category somewhere north of $10 billion by 2025.

But sales of cannabis drinks in the U.S. are nowhere near that at the moment.

While several emerging CBD-infused drinks companies like Mad Tasty and Recess are beginning to build a category of hemp-derived beverage offerings that can be sold at mainstream retail outlets, the market for THC-infused beverages that get consumers high is still nascent.

The largest producer in California, Cann, has raised $5 million from an impressive roster of well-known celebrities, but even that company will only move about 3.5 million units this year.

Other brands like Wunder and Two Roots are also making headway, but without the ability to sell THC-infused…



Read MoreAphria CEO Irwin Simon is Bullish on Cannabis Drinks