Aphria has closed its acquisition of SweetWater Brewing Company, a U.S.-based independent craft brewer, in a deal that Aphria CEO and Chairman Irwin Simon said will give the Canadian licensed producer an opportunity to build brand awareness in the U.S. ahead of federal legalization.
Aphria plans to introduce its adult-use cannabis brands, such as Broken Coast, Riff, Soleil and Good Supply, to the U.S. market as cannabis-free beverages through SweetWater products and harness SweetWater’s expertise in what Simon said is the growing, $29-billion craft beer market in the U.S.
“The beer and cannabis industry have been tied closely in recent years, as both industries are ripe for a cross-over audience,” Simon said in an email to Cannabis Business Times and Cannabis Dispensary. “SweetWater Brewing Co. has a ready-made brand and fan base that is closely aligned with a cannabis lifestyle. Aphria sees a huge opportunity to pre-seed our cannabis brands in the U.S. through SweetWater in advance of U.S. legalization. As well, its distribution in 27 states and Washington, D.C. provided Aphria a recognizable foothold and infrastructure in the U.S. with long-term potential.”
In addition to establishing its own brands and growing its U.S. presence, Aphria will also introduce SweetWater’s beer and hard seltzer products to Canada.
Aphria and SweetWater share a strong focus on R&D and innovation, Simon said, and SweetWater is no stranger to the cannabis market—in 2018, the company introduced a beer with plant-derived terpenes that mimic the smell of cannabis. With growing legalization in the U.S., Simon said Aphria plans to introduce a CBD- or THC-infused canned seltzer in both the U.S. and Canadian markets.
“We believe beverages will become one of the biggest segments in the cannabis industry once adult-use cannabis is federally legalized and distribution regulations are modified in the U.S.,” Simon said. “The cannabis beverage category remains small currently because of how people are allowed to consume. Once regulations change and [more legal markets allow] people [to] consume cannabis beverages on-premise, it could change the dynamic of how big the category is.”
Looking ahead, Simon said he believes the acquisition will help position Aphria as a global cannabis-lifestyle consumer packaged goods company that will include non-cannabis operations in the U.S., Germany and Argentina.
“The opportunity for Aphria is tremendous,” he said. “In the near-term, we look forward to bringing more SweetWater brands to Canada, while we prepare to introduce Broken Coast, Good Supply, Riff and Solei brands to the U.S.”