Why Authentic Brands Group Is Getting Into the Cannabis Business
Authentic Brands Group today announced a long-term partnership with Tilray, Inc, a global pioneer of cannabis production.
Through the 10-year partnership, Tilray will pay ABG an initial $100 million and up to $250 million in cash and stock. The marijuana disruptor will be eligible for 49 percent of net revenue from AGB Brands’ cannabis products.
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ABG — which snapped up Camuto Group, Nine West and Nautica in 2018 to push further into the shoe space — is getting into the weed business while the iron is hot.
Following a slew of U.S. states and Canada legalizing recreational marijuana, the industry is flying high. A New Frontier data report shows that it is set to reach $2.5 billion by 2022 — with hemp-derived CBD product sales increasing from $390 million in 2018 to $1.3 billion by 2022.
Further, the anti-weed constituency has cooled off: A December 2018 Pew Research Center survey found that 62 percent of Americans believe marijuana should be legal — up from just 31 percent in 2000.
As the industry grows, the product is being sold in new and innovative ways, from beauty products infused with cannabis extracts to upscale edibles.
Tilray and ABG said they’ll work on innovative health and wellness products suited to users’ lifestyle needs. Where consumers once equated cannabis with a stoner lifestyle, they are now seeing CBD-infused items as part of a healthy regimen, according to a February 2018 trend report by JWT Intelligence.
“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’s president and CEO, said in a statement. “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.”
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