Tilray, Inc. has inked a long-term revenue sharing agreement with Authentic Brands Group (ABG).
The deal will see Tilray market and distribute a portfolio of consumer cannabis products within ABG’s brand portfolio.
The owner of more than 50 brands, ABG partners with an expansive network of cannabis manufacturers, operators and retailers.
The firm, which generates approximately US$9 billion in retail sales annually, has a global retail footprint of over 100,000 points of sale and more than 4,500 branded freestanding stores and shop-in-shops.
Tilray will initially pay to ABG US$100 million and up to US$250 million in cash and stock, subject to the achievement of certain commercial and/or regulatory milestones.
The two parties will leverage ABG’s portfolio of brands to develop, market and distribute consumer cannabis products across the world (as and where legal), with an immediate focus on opportunities, including the CBD market in Canada and the US.
“We are thrilled to partner with ABG, a global leader known for expertly managing and marketing an owned portfolio of iconic brands.”
Brendan Kennedy, Tilray
Tilray will be the preferred supplier of active cannabinoid ingredients for such products, and will have the right to receive up to 49% of the net revenue from cannabis products bearing ABG brands, with a guaranteed minimum payment of up to US$10 million annually for 10 years, subject to certain commercial and/or regulatory milestones.
“We are thrilled to partner with ABG, a global leader known for expertly managing and marketing an owned portfolio of iconic brands,” said Brendan Kennedy, Tilray President and CEO.
“As we work to expand Tilray’s global presence, this agreement leverages our complementary strengths and will be accretive to our shareholders as we reach new consumers across the entertainment, fashion, beauty, home and health and wellness sectors. We look forward to working with ABG to bring unique and sought-after branded cannabis products to the marketplace.”
Daniel W. Dienst, ABG Executive Vice Chairman, said, “Tilray’s unyielding focus on science, product quality, operational excellence and innovation has allowed them to quickly emerge as a leader in the cannabis industry. We see extraordinary potential for cannabis in the fast-growing health and wellness category – particularly for CBD products in the United States and around the world – and are excited about this long-term partnership.”
Tilray’s financial advisor on the transaction was BofA Merrill Lynch. Authentic Brands Group’s legal advisor on the transaction was Paul, Weiss, Rifkind, Wharton & Garrison LLP.Cannabis Business Worldwide