Aphria buys SweetWater Brewing Company in $300m deal

Canadian cannabis company Aphria has acquired SweetWater Brewing Company, an independent craft brewer in the US.

As part of the deal, unitholders of SweetWater have received $250 million in cash and $50 million in Aphria stock. Under the terms of the agreement, SweetWater will become a wholly owned subsidiary of Aphria and will join its medical cannabis brands.

Founded in 1997, SweetWater produces a variety of seasonal and specialty beers, as well as a portfolio of brands using terpenes and natural hemp flavours. With established distribution across 27 states, SweetWater beverages are available in both off-premise retail locations – ranging from independent bottle shops to national chains – and on-premise businesses such as restaurants.

In addition to diversifying Aphria’s product offering and broadening its consumer reach, the deal will accelerate the cannabis company’s entry into the US, enabling it to access the market more quickly in the event of federal legalisation.

The combined company is said to create mutual opportunities for accelerated expansion into other cannabis and beverage related products in the US and Canada. Following the deal, SweetWater says it will become a more diversified company with the continued creation of beers, seltzers, spirits and non-alcoholic beverages.

“We are excited to take this significant step forward to build upon our existing foundation in cannabis with the acquisition of SweetWater and their complementary cannabis lifestyle brands,” said Irwin Simon, Aphria chairman and CEO.

He added: “We look forward to expanding our addressable market and leveraging SweetWater’s existing infrastructure to accelerate Aphria’s entry into the US ahead of federal legalisation of cannabis to fuel sustainable profitable growth.”