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SweetWater Brewing sold to a global cannabis company

Here’s something interesting out of left field: A global cannabis company based in Canada, Aphria Inc., is buying SweetWater Brewing Co. for $300 million. Aphria is looking to use SweetWater’s U.S. infrastructure (manufacturing, marketing, innovation, promotion, distribution) to build awareness in the U.S. for Aphria’s cannabis brands. The deal is expected to close before the end of December 2020.

“Our strong balance sheet and access to capital have enabled us to enter the U.S. through this strategic and accretive acquisition. We will establish and grow our U.S. presence through SweetWater’s robust, profitable platform of craft brewing innovation, manufacturing, marketing and distribution expertise,” said Irwin D. Simon, Aphria’s Chairman and Chief Executive Officer. “At the same time, we will build brand awareness for our adult-use cannabis brands, Broken Coast, Good Supply, Riff and Solei, through our participation in the growing $29 billion craft brew market in the U.S. ahead of potential future state or federal cannabis legalization. We look forward to building upon the strengths of each of our respective and complementary brands, diversifying our product offering, broadening our consumer reach, and enhancing loyalty with consumers.”

Why SweetWater?

I mean, if you’re a global cannabis business and you’re looking to get into beer / grow your presence in the U.S. with an established brand, SweetWater is your obvious dance partner. Founded in 1997 by Freddy Bensch, SweetWater has built a top tier brand in terms of name recognition and consistency in craft beer, and it has always stayed true to its affinity for weed culture. In addition to branding, SweetWater’s various 420 strains of craft brews use terpenes and natural hemp flavors that, when combined with select hops, emulate the flavors and aromas of popular cannabis strains. They even host their own jam band festival each year, Sweetwater 420 Fest.

Branding synergies aside, the deal makes sense for Aphria Inc. because Sweetwater is crushing it in sales. In 2019, SweetWater Brewing Company generated net revenue and adjusted EBITDA of $66.6 million and $22.1 million, respectively, and production volume increased 7% year-over-year to nearly 261,000 barrels, twice the growth rate of the craft beer market nationally, according to the Brewers Association. In 2019, the 420 Strain G13 IPA became the top new craft brand in the U.S. in the first 12 months after its launch.

In addition to its 27 state distribution footprint, In addition to its traditional distribution footprint, SweetWater 420 Extra Pale Ale and IPA are served on all Delta flights nationwide.

“We are excited by the opportunity to join a leading global cannabis company and build a successful future based on the strengths we both bring to this combination,” said Bensch. “We will leverage our growing beverage offering and build an even stronger, more diversified company with a continued focus on authentic and distinctive brands using some of the freshest, most flavorful ingredients to create innovative and high quality beverages including beers, seltzers, spirits and non-alcoholic beverages that our loyal and growing consumer base has come to expect from SweetWater.”

The acquisition is expected to further diversify Aphria’s current net revenue mix, with the combined cannabis and distribution business representing approximately 85 percent of net revenue and the craft brewing and beverage business representing approximately 15 percent of net sales, based on the pro forma net revenue. In addition, Aphria expects the acquisition to be margin accretive with SweetWater generating adjusted EBITDA margins well in excess of 30 percent.

SweetWater Brewing sold to a global cannabis company Here’s something interesting out of left field: A global cannabis company based in Canada, Aphria Inc., is buying SweetWater Brewing Co. for

A Canadian Cannabis Company Plans to Acquire Atlanta’s SweetWater Brewing

Canadian cannabis company Aphria plans to acquire the longtime Atlanta brewery in a multi-million dollar deal

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SweetWater Brewing Company

Canadian cannabis company Aphria plans to acquire Atlanta’s SweetWater Brewing Company in a multi-million dollar deal. A late Wednesday afternoon press release announced the intended acquisition of SweetWater Brewing and indicates the $300 million deal should be finalized by the end of December.

Aphria has no plans to make any changes to SweetWater’s beers or branding or its taproom and kitchen operations once the acquisition is complete. Founder Freddy Bensch will remain as SweetWater’s CEO, and Aphria will retain the brewery’s management team and its 125 employees.

The announcement of the impending acquisition comes after Arizona, South Dakota, Montana, and New Jersey approved ballot measures on November 3 to legalize recreational marijuana for adults in those states, joining 11 other states across the country. In the press release, Aphria states it plans to build up infrastructure and position the company to quickly expand distribution into other markets throughout the United States, and in the event recreational marijuana becomes federally legalized.

SweetWater’s current bottling and canning capabilities are estimated at nearly 23.5 million gallons annually, with kegging at approximately 1.5 million annually. SweetWater products can be found at over 10,000 restaurants and bars and 29,000 retail locations across the U.S., according to the press release. Aphria hopes to introduce the U.S. market to its brand via craft beer, along with non-alcoholic drinks and products and other beverages, including the burgeoning hard seltzer market, which SweetWater began producing earlier this year.

Bensch founded SweetWater Brewing Company in 1997. In addition to its seasonal beers and year-round brews, like SweetWater 420 Extra Pale Ale, 420 IPA, and Goin’ Coastal IPA, the brewery introduced a 420 strains line last year using terpenes and natural hemp flavors. The company also hosts SweetWater 420 Fest music festival in downtown Atlanta every year.

In 2019, the brewery revamped its taproom and opened a full-service kitchen serving snacks and pub bites to pair with SweetWater’s beers. Several dishes incorporate SweetWater brews, like the 420 boiled peanuts and beer-battered cod sandwich.

Canadian cannabis company Aphria plans to acquire the longtime Atlanta brewery in a multi-million dollar deal