Global cannabis firm Tilray is adding an East Coast craft brewery to its growing brewery portfolio, with the acquisition of Montauk Brewing Company.
Financial terms of the transaction were not immediately disclosed, but the deal is for 100% of the New York craft brewery. The transaction closed today.
Montauk, which was founded in 2012, joins a portfolio of craft breweries that includes Atlanta’s SweetWater and San Diego-founded Green Flash and Alpine Brewing – three brands Tilray has acquired in recent years.
Production for Montauk declined -4%, to 46,935 barrels, in 2021, after reaching a peak of 49,127 barrels of beer in 2020, according to data from the Brewers Association (BA). SweetWater, the 10th largest BA-defined craft brewery by volume, produced 262,500 barrels of beer in 2021, a +1% year-over-year increase.
“Montauk Brewing is an iconic brand with leading market share and distribution in the northeast,” Irwin D. Simon, Tilray chairman and CEO, said in a press release. “Tilray Brands intends to leverage SweetWater’s existing nationwide infrastructure and Montauk Brewing’s northeast influence to significantly expand our distribution network and drive profitable growth in our beverage-alcohol segment. This distribution network is part of Tilray’s strategy to leverage our growing portfolio of U.S. CPG brands and ultimately to launch THC-based product adjacencies upon federal legalization in the U.S.”
The addition of the Montauk-based craft brewery gives Tilray an East Coast craft brewery and “further strengthens the company’s net revenue,” the company said. Montauk also gives it “a strong brand and accretive business,” as well as “additional scale” and infrastructure and brands, should cannabis receive federal legalization in the U.S.
With Montauk, Tilray said it gets a partner that is “well-known for its beloved product portfolio, premium price point, and distribution across over 6,400 points of distribution”, including at top national retailers such as Target, Whole Foods, Trader Joe’s, Stop & Shop, Walmart, 7-Eleven, Costco, BJ’s, and Speedway.
Simon welcomed Montauk founders Vaughan Cutillo and Eric Moss and general manager Terry Hopper to the Tilray brand family.
Additionally, Tilray announced the appointment of Ty H. Gilmore as president of Tilray’s U.S beer business. Gilmore most recently worked as executive senior VP at Glazer’s Beer and Beverage, overseeing sales and operations across 11 distributors, according to the release. He has worked in bev-alc for nearly three decades, including multiple stints at Diageo North America in various sales leadership and national accounts roles and a short time as president of Flying Embers from 2019 to 2020.
Tilray has acquired several beverage-alcohol brands in recent years, beginning with Atlanta-based SweetWater Brewing for $300 million in late 2020. With that deal, Tilray – then Aphria, prior to its merger with the company’s current namesake – announced its intention was to introduce American craft beer to Canada, expand SweetWater within the U.S. and eventually use its new beverage production infrastructure to create cannabis-infused, non-alcoholic beverages in the U.S.
Seven months after the acquisition of SweetWater, Tilray acquired the 32,450 sq. ft., Fort Collins, Colorado-based production facility of Red Truck Brewing, a Canadian brewery that had purchased the facility from Fort Collins Brewery. The facility aligned with SweetWater’s westward expansion, which reached California, Oregon and Washington in February 2022 via partnerships with the Reyes Beer Division and Columbia Distributing.
In late 2021, Tilray embarked on a shopping spree that began with the acquisition of Breckenridge Distillery, a Breckenridge, Colorado-based craft distillery. Several weeks later, Tilray acquired California-based craft brands Green Flash Brewing and Alpine Brewing for $5.1 million.
Arlington Capital Advisors served as the financial advisor to Montauk.