From brewpubs to cannabis clubs? How Tilray’s £33m BrewDog deal will roll out

So what does BrewDog have to do with cannabis? It was certainly underplayed during the conference call with analysts held earlier this week, during which Irwin Simon, chairman and chief executive at Tilray Brands, described the deal as a “natural step for the global beverage vision which we set in motion several years ago”.

Simon highlighted the “word-class” scale of BrewDog, with its Ellon brewery alone able to produce up to 2.4 million hectolitres annually. He is also confident BrewDog will be cash-flow positive by fiscal 2027, generating annual net revenue of roughly £149m and adjusted earnings before interest, taxes, depreciation and amortisation of up to £6m.

“We’re not here to corporatise BrewDog. We’re fully committed to making beer fun again”

He has even grander ambitions for Tilray Brands’ beverage platform to reach £374m in annual revenue following the BrewDog acquisition, which would make it one of the largest diversified craft beverage providers in the world.

Simon said: “This is a disciplined, highly strategic, financially compelling fit for Tilray. We are not entering Europe from scratch; we now own a proven-scale European beverage platform, accelerating our beverage strategy by years.”

And he knew it was all for a bargain: “You simply cannot build this platform in Europe today for the amount of money we paid.”

As well as using the opportunity to introduce its high-performing US brands to the UK market, focusing primarily on Montauk, Shock Top and SweetWater, Tilray is considering supplying BrewDog beers at its competitor pubs, which was historically off-limits.

“Entrepreneurial spirit is exactly what made BrewDog a great brand and that is something we respect and intend to preserve,” he added. “We’re not here to corporatise BrewDog. We’re fully committed to making beer fun again, like we have with our other brands.” 

From a bark to a whimper

Mark McCulloch, founder of Hospitality Rising and chief executive of hospitality marketing consultancy Supersonic Inc, told The Caterer that for a time, BrewDog had got a lot of things right.

“If you talk to anyone in craft beer, it’s very unlikely BrewDog didn’t touch them in some way. They were kind of like the Beatles of craft beer: every other band that came after them had a little bit of them in it,” he said.

So what went wrong for this once pioneering craft beer brand?

As well as grappling with the rising operating costs and taxes which have beset hospitality operators across the sector, BrewDog made a series of blunders that saw it lose its reputation as a disruptor and innovator, making it uncool to niche craft beer drinkers while lacking the scale and reach of larger players across the sector.

In 2021, more than 100 employees accused the business of fostering a “culture of fear” that hinged on a “cult of personality” around its founders James Watt and Martin Dickie.

In subsequent, consecutive years, BrewDog relinquished its ethical B Corp certification, surrendered its carbon negative status and rolled back on its commitment to pay the Real Living Wage.

Watt departed as chief executive of the business in 2024 after five consecutive years of mounting losses. There was subsequent churn at the helm of the business, with three subsequent CEOs appointed in just over a year.

Following the news, Watt issued an apology on LinkedIn, in which he said he was “heartbroken” for all those who lost their jobs and the “brilliant equity punks who did not get the return on their investment they wanted”.

He added: “I would have loved to save every single job and every single equity punk investment. Ultimately, I couldn’t. That will stay with me…  I am sorry that I was not able to repay the faith you bestowed in me with the outcome you all deserved.”

What next?

Tilray Brands is still in the midst of separate negotiations to acquire certain BrewDog assets in the US and Australia, which are due to be finalised in 30 days. Simon told analysts the American BrewDog division is roughly a “$20m business coming from brewpubs in Las Vegas, Columbus and Cleveland”, while Tilray Brands looks to acquire two pubs in Australia.

Speaking to The Caterer on BrewDog’s outlook closer to home, Katie Jenkins, marketing director at UK hospitality insights firm KAM, said: “The next phase for BrewDog should be about rebuilding confidence with both consumers and the trade, while ensuring the brand remains relevant in a craft beer market that is now more mature and more competitive than when BrewDog first emerged.

“Drinkers are increasingly looking for authenticity, quality and clear brand purpose, and many craft brands have had to work harder to maintain that connection as they scale.”

She believed Tilray’s cannabis expertise would likely have a “limited” impact in the near term, given regulatory constraints across the UK hospitality market. However, she pointed out there is “increasing consumer interest” in the low- and no-alcohol and functional drinks segment, citing KAM research that found “nearly one in five UK adults have tried a ‘CBD-infused drink’”.

Saxon Coop, founder and chief executive of Toke, a platform connecting cannabis consumers, clinics and dispensaries, saw a bigger opportunity for intersections between BrewDog and Tilray’s marijuana division.

“Drinking culture is declining, pubs are closing at a rate people aren’t talking about loudly enough, and now it’s a cannabis company stepping in to acquire the infrastructure alcohol spent decades building,” he said.

While Coop expected BrewDog to remain a beer brand “for now”, he believed the acquisition could form part of Tilray’s “fairly obvious” longer-term plan to transform existing BrewDog real estate into cannabis clubs and safe consumption spaces, similar to developments in Spain and Germany. This would put Tilray significantly ahead of the rest of the market, should the sector grow into something more prevalent in the UK.

“Tilray already operate across both cannabis and beverages, which puts them in a genuinely interesting position: cannabis-infused drinks, wellness products, social clubs, all of that becomes possible as regulation evolves. The deeper question is what food and drink spaces actually look like in 10 years. That’s the bet they’re making,” he added.

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