Anheuser-Busch InBev (AB-InBev), the beer giant known for its popular brands like Bud Light and Budweiser, is facing yet another blow to its already struggling reputation. In a surprising move, AB-InBev has announced that it will be selling eight of its craft beer brands to Tilray Brands, a Canadian cannabis company. This decision will significantly reduce AB-InBev’s craft beer portfolio and further contribute to the company’s ongoing decline.

According to a recent announcement from AB-InBev, the eight craft beer brands being sold to Tilray Brands include Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and Hiball Energy. This deal, set to be finalized in September 2023, comes with a price tag of $85 million, as reported in a Tilray 8-K filing.

In addition to the beer brands themselves, Anheuser-Busch will also be parting ways with the associated employees, breweries, and brewpubs. This move marks a significant shift in AB-InBev’s business strategy and raises questions about the company’s future direction in the craft beer industry.

The irony of AB-InBev selling its beer brands to a cannabis company like Tilray Brands is not lost on industry observers. The marriage of alcohol and cannabis has long been a topic of debate, with some arguing that the two should be seen as complementary industries, while others view them as competitors. Regardless, the fact that AB-InBev is relinquishing its beer brands to a marijuana-focused company adds a comedic element to the situation.

The sale of these craft beer brands to Tilray Brands is just the latest in a series of setbacks for Anheuser-Busch. The company has been facing a continuous decline in recent years, with several factors contributing to its downfall.

One significant blow to AB-InBev’s reputation came in the form of the Dylan Mulvaney disaster. Mulvaney, a transgender brand ambassador for Bud Light, sparked controversy and backlash, resulting in a significant decline in sales for the brand. The incident not only tarnished Bud Light’s image but also impacted the overall perception of Anheuser-Busch as a company.

Even prior to the Mulvaney disaster, Anheuser-Busch was already experiencing declining sales. Bud Light, once America’s favorite beer, has seen a steady decline in popularity and sales. In fact, sales for Bud Light dropped by another 26% following the Mulvaney incident, further adding to the company’s woes.

Another factor contributing to the decline of Anheuser-Busch is the changing preferences of beer consumers. Craft beer has gained significant traction in recent years, with consumers showing a growing interest in unique and locally brewed options. This shift in consumer preferences has left traditional beer giants like AB-InBev struggling to keep up.

The sale of these craft beer brands to Tilray Brands has significant implications for both AB-InBev and the craft beer industry as a whole. For AB-InBev, it represents a strategic move to streamline its operations and focus on its core brands. By divesting itself of these craft beer brands, the company can allocate more resources to its flagship products like Bud Light and Budweiser.

On the other hand, the acquisition by Tilray Brands presents an opportunity for the Canadian cannabis company to expand its presence in the U.S. craft beer industry. By adding these well-known craft beer brands to its portfolio, Tilray Brands can tap into a new consumer base and diversify its offerings beyond cannabis products.