Tilray Strengthens Strategic Position in the U.S. with Acquisition of Breckenridge Distillery

Accretive Acquisition of Award-Winning Producer of Distilled Spirits Expands Tilray’s U.S. Offerings into the On-Trend Spirits Category

Tilray’s Diversified, Growing CPG Portfolio in the U.S. Delivers Revenue and EBITDA and Establishes Robust Infrastructure Upon Cannabis Legalization

NEW YORK: Tilray, Inc., a leading global cannabis-lifestyle and consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, today announced the strategic acquisition of Breckenridge Distillery, a leading distilled spirits platform located in Breckenridge, Colorado widely-known for its award-winning bourbon whiskey collection and innovative craft spirits portfolio. Tilray expects the acquisition to be immediately accretive to EBITDA. 

Irwin D. Simon, Chairman and CEO, said, “Tilray’s strength lies in our ability to identify and significantly expand leading CPG lifestyle brands that resonate powerfully with consumers. Breckenridge Distillery is an iconic addition to our platform in this respect based on its portfolio of award-winning spirits, passionate consumer engagement, and a strong sales and distribution network. We see tremendous potential for Breckenridge and our existing SweetWater brand to complement each other, expanding their respective reach and driving further profitable growth in our beverage alcohol segment.”

Mr. Simon continued, “More generally, the Breckenridge Distillery transaction is consistent with Tilray’s strategy of leveraging our growing portfolio of U.S. CPG brands to launch THC-based product adjacencies upon federal legalization in the U.S. These significant, diversified revenue streams are key to delivering on our ultimate goal of industry leadership with $4 billion in revenue by the end of fiscal year 2024.”

Bryan Nolt, Breckenridge Distillery’s Founder and Chief Executive Officer, added, “We are excited to join Tilray and drive revenue growth as part of its global and leading CPG and cannabis-lifestyle platform. The award-winning spirits that have driven our success will unquestionably benefit from access to Tilray’s global distribution network and opportunities to expand into cannabis and edible-related products in the U.S.”

Founded in 2008 by Mr. Nolt, the Breckenridge Distillery is most widely known for its blended bourbon whiskey, a high-rye mash American-style whiskey, and a collection of artisanal spirits offering that brings to life the best that Colorado has to offer. Breckenridge Distillery’s consumer engagement strategy is defined and differentiated through unique experiential marketing and highly-effective social media outreach and includes a lucrative and exclusive partnership as the hometown Bourbon of the Denver Broncos. Among other accolades, Breckenridge’s blended bourbon whiskey is a 4x winner of Best American Blended Whiskey from the World Whiskies Awards. In 2018, Breckenridge was awarded the prestigious Icons of Whisky award for Brand Innovator of the Year by Whisky Magazine.

Under the terms of the acquisition, the sellers of Breckenridge were led by Sababa Partners I LLC, an entity controlled by Sir Martin E. Franklin.

Strategic and Financial Benefits

In addition to acquiring a strong brand and accretive business, this strategic acquisition delivers additional scale in the beverage alcohol categories and further positions Tilray with infrastructure and a larger footprint in the U.S. market upon federal cannabis legalization.

Tilray further believes the acquisition will provide several financial and strategic benefits, including:

Joins Sweetwater to Further Diversify and Grow Tilray’s Beverage Alcohol Business:
Breckenridge Distillery joins SweetWater Brewing Company as the cornerstones of Tilray’s beverage alcohol segment and further diversifies the company’s net revenue mix. Breckenridge Distillery is expected to be immediately margin accretive with Breckenridge generating adjusted EBITDA margins of approximately 25 percent.

Provides for Additional Significant Innovation Opportunities while Expanding Tilray’s Addressable Market in the U.S.:
When federally permissible, Tilray believes the acquisition of Breckenridge Distillery will enable Tilray to commercialize new and innovative products through the development of non-alcoholic distilled spirits, including bourbon whisky, that is infused with cannabis.

Opportunity for Accelerated Growth of Breckenridge Distillery:
With more than 85% of its revenue generated in Colorado, Breckenridge Distillery has enormous potential to expand its customer base and grow throughout the U.S. as a true national brand. To that end, Tilray intends to leverage SweetWater’s existing nationwide infrastructure to accelerate Breckenridge Distillery’s and create new, greatly-expanded consumer awareness and product adoption.

About Tilray
Tilray, Inc. (Nasdaq: TLRY; TSX: TLRY) is a leading global cannabis-lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America that is changing people’s lives for the better – one person at a time – by inspiring and empowering the worldwide community to live their very best life by providing them with products that meet the needs of their mind, body, and soul and invoke a sense of wellbeing. Tilray’s mission is to be the trusted partner for its patients and consumers by providing them with a cultivated experience and health and wellbeing through high-quality, differentiated brands and innovative products. A pioneer in cannabis research, cultivation, and distribution, Tilray’s unprecedented production platform supports over 20 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and alcoholic beverages.

Tilray Launches Initial Public Offering

CANADA: Tilray, a vertically-integrated and federally-licensed cannabis cultivator, processor and distributor, announced that it has launched an initial public offering of its Class 2 common stock pursuant to a registration statement on Form S-1 previously filed with the United States Securities and Exchange Commission. Tilray has applied to list its common stock on the Nasdaq Global Select Market under the ticker symbol “TLRY”.

 

Agreement represents major milestone recognizing medical cannabis as a conventional medicine for patients in need

Tilray is offering 9,000,000 shares of Class 2 common stock at an initial price to the public between US$14.00 and US$16.00 per share (approximately CAD$18.40 to CAD$21.00 per share1). Tilray intends to grant the underwriters a 30-day over-allotment option to purchase up to 1,350,000 additional shares.

In order to qualify the offering of securities in Canada and to ensure that purchasers in Canada are not subject to restrictions on resale, Tilray has also filed a preliminary prospectus for a proposed IPO in Canada with the securities regulatory authorities in each province of Canada other than the Province of Quebec. Tilray does not intend to list on any stock exchange in Canada.

Cowen and BMO Capital Markets are acting jointly as book-runners for the proposed IPO. Cowen is acting as the sole book-running manager for the IPO in the United States, and BMO Capital Markets is acting as the sole book-running manager for the IPO in Canada. Eight Capital is acting as lead manager for the IPO in Canada. In the United States, Roth Capital Partners is acting as lead manager and Northland Capital Markets is acting as a co-manager for the IPO.

The offering will be made only by means of a prospectus. Copies of the U.S. preliminary prospectus may be obtained from the SEC’s website or from Cowen by contacting Cowen c/o Broadridge Financial Services, 1155 Long Island Avenue, Edgewood, NY, 11717, Attn: Prospectus Department. Phone: (631) 274-2806. Copies of the Canadian preliminary prospectus may be obtained from www.sedar.com or from BMO Capital Markets by contacting BMO Capital Markets, Brampton Distribution Centre c/o The Data Group of Companies, 9195 Torbram Road, Brampton, Ontario, L6S 6H2 or by telephone at (905) 791-3151 Ext 4312 or by email at torbramwarehouse@datagroup.ca.

A registration statement on Form S-1 relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

1Based approximately on the Bank of Canada daily exchange rate on July 5, 2018 of C$1.3129 = US$1.00