Hello, everyone. Thank you for joining us to discuss today's announcement. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session for analysts conducted via audio. I would now like to turn the call over to Raphael Gross of ICR to begin. Thank you.
Thank you. By now, everyone should have access to the press release, which is available on the investor sections of our website at www.tilray.com. We have also posted an investor deck there as a reference document. During today's presentation, we will be making forward-looking statements. These statements are based on our current expectations and beliefs and involve known and unknown risks and uncertainties, which may prove to be incorrect. Actual results could differ materially from those described in these forward-looking statements. Please note the text in our press release for a discussion on the risks and uncertainties associated with such forward-looking statements. Now, I'd like to turn the call over to Tilray Brands Chairman and Chief Executive Officer, Irwin Simon.
Thank you very much, Raph, and I know everybody has seen our press release that was released at 4:05 P.M. today. I am joined today by our CFO, Carl Merton, our Head of International Business and Chief Strategy Officer, Denise Faltischek, and President of our U.S. Beer business, Ty Gilmore. We appreciate you joining us for the brief call to discuss this very exciting and transformational transaction that will fuel Tilray Brands' future in the U.S. craft beer industry and reflects the ongoing strides we're making in diversifying our overall business. Recall the other week when we announced 2023 fiscal year results, I mentioned that when I first joined Aphria team in 2018, Aphria was exclusively a Canadian cannabis LP with approximately $50 million in annual revenue and minimal cash.
At Tilray Brands, we've come a long way over the last five years, having reached close to $1 billion in revenue across four distinct complementary business segments, while holding still nearly $500 million in cash, and with this makes us EBITDA positive with this acquisition. As we just announced this afternoon, we'll be acquiring 8 craft beer and beverage brands from Anheuser-Busch ABI, their high-end division. The transaction includes breweries, brew pubs associated with these business and is expected to be completed later this year, subject to customary closing conditions. The purchase price will be paid in cash.
Having already built a portfolio of best-in-class brands across the medical cannabis, adult use cannabis, beverage alcohol, wellness, and distribution, this acquisition is indicative of our success building a diversified CPG growth strategy as we approach that $1 billion in revenue, with diversification and balance across our cannabis lifestyle and our CPG brands. Pro forma revenue of approximately $860 million is comprised of approximately 30% cannabis, consisting of medical and adult use, and inclusive of our recent HEXO acquisition, approximately 30% from our beverage alcohol, and approximately 30% from medical distribution, and approximately 10% from our food and wellness products.
More specifically, we expect today's acquisition triples the size of our already fast-growing beverage alcohol segment from 4 million cases to 12 million cases annually, positioning us the fifth-largest craft brewer in the U.S., with a 5% craft beer market share. From a cold start, just under 3 years ago, we acquired SweetWater. This is a rapid line that we have delivered value every step of the way, and we're poised to continue to do so. The proof point here is that upon closing the transaction, pro forma revenue is expected to reach $300 million annually for our fast-growing, profitable U.S. alcohol portfolio brands. Tilray's beer geographical presence will be truly nationwide.
As a pro forma basis, we expect to be the number one craft beer company in Pacific Northwest, the number five craft beer company in the Northeast, the number four craft beer company in the Southeast, and the number four craft beer company in the Midwest. Beyond our presence in these markets, we see particularly exciting opportunities for all these brands in the Great Lakes and Texas. This is an exciting milestone for our beverage portfolio, no question. I also want to emphasize that cannabis remains central to our overall strategy. We remain excited by the opportunities we have in the cannabis industry as the market leader in Canada, the largest federally legal cannabis market in the world, where we have an approximately 13% market share, and are the medical cannabis leader across Europe through our medical cannabis market share position in Germany, Poland, and Luxembourg.
We also have a leader in the hemp food industry with a 51% branded market share with Manitoba Harvest. I will briefly describe the individual brands in a moment, but let me first say that they each possess key differentiation hallmarks, strong consumer loyalty, authentic and compelling original stories, consistency, and quality. They further have a history of delivering award-winning products and tremendous, tremendous growth opportunities. They will join our existing beverage alcohol portfolio, which consists of SweetWater Brewing Company, Montauk Brewing Company, Alpine Beer Company, and Green Flash Brewing Company. We're also owned by Breckenridge Distillery, the award-winning brand and world's best blended whiskey, and Happy Flower CBD sparkling non-alcoholic cocktails. We see the following considerations as strategic rationale for this acquisition. It greatly accelerates and strengthens Tilray's leadership in craft brewing.
These highly regarded craft brands solidify our market share nationwide and all have potential for upside growth across all our major channels, stemming from expanded capabilities in beverage, alcohol, and non-alcoholic offerings. It expands distribution nationally. It provides us with modern facilities and operations. This acquisition includes 4 production facilities across the U.S., which are all up-to-date with state-of-the-art equipment. This brings our business to 6 production facilities. There are also 8 brewpub locations, which all have beautiful, compelling aesthetics that are popular destinations for their customers. This brings our total number of brewpubs to 12. It also provides us with additional manufacturing capacity and innovation capabilities for commercial expansion opportunities with beverage alcohol. Last but not least, it generates EBITDA and synergies, and of course, additional synergies that are being identified to increase profitability. These brands are immediately EBITDA positive to our overall business.
As we look ahead, our big bets will be driven by consumer and data insights that span innovation, taproom activation, trial and sampling, operational efficiencies, convenience, and channels that have white space opportunities in natural and regional strongholds, across categories, and greater focus on e-commerce. Let me briefly describe each of these iconic brands. Shock Top is an award-winning traditional Belgian-style wheat ale that is flavorable, refreshing. It has high consumer awareness and strong on-premise. Shock Top also has a seasonal lineup led by Twisted Pretzel, which delivers the delicious taste of the bakery fresh pretzels. Blue Point Brewing holds regional relevance in the Northeast as one of the largest breweries in New York State.
The brand brews a lineup of easy drinking and innovative craft beer, and has won numerous awards from the World Beer Cup, the Great American Beer Festival, and the New York Craft Beer Competition, among others. Breckenridge Brewery is one of the leading craft brands in Colorado and has grown into one of the most recognized craft breweries in the U.S. It has 2 locations, the original Breckenridge location and Farmhouse location in Littleton. 10 Barrel Brewing is one of the most acclaimed breweries in the U.S., boasting an award-winning team of brewers and 4 brewpub locations. The brand has built a loyal following in the Pacific Northwest and is known for its outdoor adventure and vibe. Redhook Brewery is one of the original craft breweries, brewing great beers for more than 4 decades and is a recipient of many awards.
In 2017, it opened up Redhook Brewlab in Seattle's Capitol Hill neighborhood with an 8-barrel brewing system, which consumers can taste the latest experiments. Earlier this year, it launched the Big Ballard IPA variety pack, the industry's first Imperial Craft 18-pack. Widmer Brothers Brewing is one of the largest craft brewers in the Pacific Northwest. It has won numerous awards over the years, including Gold in the 2023 Best Craft Beer Awards and Largest Brewery of the Year. Square Mile Cider Company offers ciders made with pure Pacific Northwest apples and lager yeast to create perfectly crisp and semi-dry hard ciders. Lastly, HiBall produces a clean energy seltzer made with zero sugar, zero calories, and organic caffeine. These non-alcoholic beverages are crafted with a proprietary, organic, certified energy brand.
What a great group of brands! Underlying the potential of these brands is an important fact that Tilray's leadership team brings deep CPG experience and stellar acquisition integration track records to drive revenue, cost synergies with these acquisitions, while expanding distribution significantly to market across the U.S. and international. It is incredible to think about this, but just in three years, we have solidified our leadership in the craft beer industry, and one that, as we have said in the past, is cool and getting cooler. Our focus is on maximizing the potential of these brands, which already have strong and committed followings. Of course, when federal cannabis legalization occurs, it will be able to include THC-based products in our beverage and wellness portfolio as well. We are excited to be partnering with ABI on this mutually beneficial transaction.
ABI has set these brands up extremely well with talented teams, significant investments over the years. They are positioned for a bright future, and we look forward to taking them all the way to the next level as we fuel the future success of the craft beer industry. We thank you for your time today as we are excited about this deal. On such relatively short notice, we now would like to be happy to open up the lines for questions. Operator?
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Vivien Azer with TD Cowen. Please proceed with your question.
Hi, good afternoon, and congratulations on the transaction.
Thank you, Vivien.
Understanding that you guys aren't disclosing the, the terms of the transaction, is there anything kind of dimensionally that you can offer, either on valuation or on EBITDA margins for the business that you just acquired? Thanks.
Right. Vivien, we have - there's, you know, an 8-K file today, with, you know, that, but price is not. Again, listen, I think, we identified these brands. We contacted ABI, and see would they be interested in some transaction. We had lots of discussions with them, worked with them, and, you know, that's how this came about. I think one of the big things, as we strategically looked at how to map together a national craft beer business and which brands out there, you know, were complementary to SweetWater, Montauk, Green Flash, Alpine, and Nelson, we came up with these brands. I got to tell you, you know, synergistically, from a production standpoint, with Blue Point, you know, with 10 Barrel, makes a lot of sense for us.
You know, now, as we look at it from a national standpoint, in each part of the country and some of the open territories and states like Texas, you know, in Louisiana, areas that we can go, we really can build out a major footprint. You've heard me say before, as I've talked about the cannabis category, I think the beer category and the craft beer category has tremendous opportunity, and I think there's a lot of new products. There's a lot of activation, there's a lot of new consumers coming in here. With that, with adding these brands, and along with this comes 8 brewhouses, which now gives us 12. You heard me say in my remarks about the activation and what we can do with these are tremendous for Tilray.
Thanks for that. If I could just squeeze in a follow-up real quick. You know, understanding that, that these brands have a pretty significant owned footprint through tap rooms and through other on-premise channels, can you just talk about revenue trends for, for the portfolio of assets that you acquired? Because all we can see is Nielsen data, and the collective brand portfolio has seen revenue declines for three consecutive years. Any just commentary on total revenue trends, please. Thanks.
Listen, I think, you know, as we come back with COVID, with on-premise, off-premise, and, you know, being part, you know, of a bigger portfolio, there's some brands that grow and some don't. I think with that, the way we looked at it is, what... Is not what the brands were doing before, is what we could do with them going forward. I think that's the big thing here is, and that's why we approached ABI, is looking at brands and what we could do with them, you know, as they complement our current brands. I think that is the key here. You know, together, what Montauk and Blue Point can do, you know, in the Northeast, what it can do from production facilities, okay?
What we could do in Texas with some of these Shock Top, which I think is just one of the greatest beer, was advertised, you know, on the Super Bowl not too long ago. You know, I think it's one of the greatest, you know, Belgian white beers, you know, out there. I think that's how we looked at it, is what we can do in growing these and what it can do in regards to our current craft beer businesses.
Understood. Thanks very much.
Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from the line of John Zamparo with CIBC. Please proceed with your question.
Hi, good afternoon.
Hi, John.
Hi. I just want to get a bit more detail on the strategic merits of this deal. You're buying it from a pretty sophisticated player. Presumably, you're not just buying it to become a larger company within the craft brew space. Just want to get a better idea of the financial benefits of combining these brands with your existing portfolio. If you could quantify synergies or just give some color on where those are coming from specifically. How long do you think it'll take to get those synergies? Any more details on that would be helpful. Thanks.
You know, as I said in my remarks, you know, scale is important. Scale is important with distributorship, scale is important with customer base, scale is in report in, in regards to procurement out there today. With that, that brings every bit of that to our current beer business. You heard me say we go from 4 million cases to 12 million cases. We've come from the 9th largest craft brewer to the, you know, 4th or 5th largest craft brewer out there. Number 1, there's scale. Number 2, it gets us into, you know, different markets from a regional standpoint. As I've said, is this here, I come back and look at the opportunities in the craft beer business is tremendous, and this fills out geographically, you know, areas that we would not been able to go with our current businesses.
Ultimately, upon legalization one day, you know, is there the opportunity for adjacencies in the THC and CBD world and having that distribution system, having those manufacturing facilities? Again, we're not dependent upon it, but there's a lot of great companies that have been built around the beer category. I think as, you know, the generations, whether it's Gen Z, you know, baby boomers, beer is something, you know, everybody seems to wanna come back and drink sometime in their lifetime and be a part of an occasion, and we see a big opportunity with it. In regards to the synergies, we think there'll be, you know, as I said, it's accretive to EBITDA.
There will be synergies, you know, that will derive from this as we put this together, and there has to be if you go from 4 million cases to 12 million. Along with the brew pubs, great sampling opportunities, great activation with customers. You just think about it, those markets we're not in today, bringing, you know, Montauk in the Pacific Northwest, you know, bringing some of the Pacific Northwest 10 Barrel back to the East Coast. You know, today, if you go to Yankee Stadium, you'll get Blue Point. You go to Citi Field, you will get Montauk. There's so many complementary areas to these, and that's why we specifically, as we approached ABI, why we focused on these brands.
Okay, understood. Thank you. Is it, is it fair to assume the profitability of these brands is, is a bit below your, your current beverage alcohol portfolio? What holds you back from lifting guidance on this? Is it more a function of timing, or is it that you think it'll take maybe 1 year to get the profitability where you want it to be?
I think it's a couple of things. It's timing, number 1. Number 2, it's, you know, timing to get the deal closed, which hopefully is in 60-90 days, and really to go in and, you know, get a good understanding before we do that.
Okay, understood. Thank you.
Thank you. Our next question comes from the line of Andrew Carter with Stifel. Please proceed with your question.
Hey, thanks. Apologies, I joined late if I asked this, but I guess after you kinda consummate this deal, will you have the bandwidth, both from a financial standpoint and kinda operationally, to kind of continue this strategy? And I think, could this proceed, like, kind of using this a platform to more aggressively go after beer brands? How do you think about kinda other categories? You've got Manitoba food. Are they off the table, or are you just getting narrowly, narrowly focused on beverages? Thanks.
Andrew, how are you? I think, listen, I come back, and I've said this before, and I said it on our earnings call. As we look at our cannabis business in Canada, where we've grown to, you know, the number 1 share in 13%, you know, of the market there, integrating HEXO and see tremendous opportunities. You know, in regards to our beverage business, you know, in a short period of time with SweetWater and Montauk and Green Flash, you know, we've become the number 5, you know, craft brewer in the U.S. In Europe, we have a strong medical and a medical distribution business, and yeah, we have, you know, Manitoba Harvest, which has a 51% share.
We have a great platform, and think about where we came from, 2018 to 2019, and, you know, approaching that $1 billion. You know, nothing's off the table here, but we have four distinct categories of businesses that we're in today, and four really good foundations and bases that are EBITDA positive, that contribute to the overall infrastructure. Gives us lots of optionality out there. We're not dependent upon legalization of cannabis. Where we are, we have great market share, and where we are, we have great brands. Like, I'm a big believer in being a national business. I'm a big believer in being a global business. There's opportunities with these brands in Canada. There's international brands.
Nothing is off the table for us, but I think what the important thing is, this strengthens and gives us a good foundation in each of the categories that we're focused on. You heard what I said before, you know, we got a 30% of adult use in medical cannabis business. We have a 30% share of our business today is in the beverage alcohol. 30% is in the medical distribution and our European business. We absolutely do have Manitoba Harvest, which absolutely there's opportunities in the whole wellness space for us.
Thanks. I'll pass it on.
Thank you.
Thank you. There are no further questions at this time. I would like to turn the floor back over to management for closing comments.
Thank you very much, operator, and thank you very much for joining us on this, you know, short notice today. Exciting news and, you know, exciting time for Tilray Brands, and I think that's important is, you know, we became Tilray Brands over a year ago. You know, we have 12 great brands in our cannabis industry today. Joining our brands, you know, in our beverage alcohol, we'll have close to 22 brands there. We have our Tilray Medical brands in Europe. We have our Manitoba Harvest, so we have a, you know, incredible stable of brands built within Tilray Brands. With that, again, we have many levers to pull, and we're very focused and diversified, but with a lot of adjacencies as we all bring it together.
It is past 4:20, so I can't tell you to go have a 4:20, but go out there and enjoy one of our great, you know, beers, whether it's SweetWater, whether it's Montauk, Green Flash, Alpine, Nelson. Now you can go out and have a, you know, Blue Point, 10 Barrel, some of the other Shock Top. There's some great, great products out there. I wanna thank, you know, the management team that worked on this here. I wanna thank the ABI team members that worked with us on there, just a first-class team that we worked with here. You know, we're excited over the next 60, 90 days to get this done. Enjoy the rest of your summer, enjoy plenty of beer, drive carefully, and look forward to speaking to you soon. Thank you.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.