Cannabis giant Tilray to purchase Blue Point Brewing, seven other craft beer brands

Blue Point Brewing Co., the local maker of Blue Point Toasted Lager and Hoptical Illusion brand beers, will be sold by parent company Anheuser-Busch to cannabis giant Tilray Brands along with seven other craft beer makers in an $85 million deal.

Patchogue-based Blue Point, which was originally purchased by Anheuser in 2014, distributes its brews across the U.S. and operates out of a 54,000-square-foot brewery and headquarters at the site of the former Briarcliffe College.

Tilray, a New York City-based cannabis researcher and cultivator with operations in the United States, Canada, Europe and Latin America, distributes cannabis consumer products, hemp-based foods and craft beverages in more than 20 countries.

In addition to Blue Point, Tilray is purchasing Shock Top, Breckenridge Brewery, 10 Barrel Brewing Co., Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Co. and HiBall Energy, according to a company announcement made Monday.

Current employees at the breweries and brewpubs associated with the brands are part of the transaction, Tilray said. 

The deal is likely to make Tilray the fifth-largest craft beer brewer in the U.S., up from its current spot as the ninth, the company said.

The all-cash purchase is expected to be finalized later this year.

“We are excited to work with the teams behind these iconic brands that command great consumer loyalty and have a history of delivering strong award-winning products with tremendous growth opportunities,” Tilray chairman and chief executive Irwin D. Simon said in a statement.

A statement from Andy Thomas, president of The High End, Anheuser-Busch’s business unit in charge of craft brewers, said, “We are committed to working with Tilray Brands over the coming months to ensure this is a smooth transition for the people who are working every day to get these amazing beers and beverages to consumers across the U.S.”

Local executives with Blue Point Brewing could not be reached for comment.

Tilray’s announcement comes after the company purchased Montauk Brewing Co. late last year for an undisclosed amount. Since that purchase, Montauk’s distribution has expanded beyond the New York metro market into Pennsylvania.

Tilray’s growing group of alcoholic beverage makers includes SweetWater Brewing Co., the Alpine and Green Flash iconic Southern California brands, and Breckenridge Distillery, the pot giant’s bourbon and spirits brand.

Blue Point, founded in 1998 by Long Islanders Mark Burford and Peter Cotter, got its start two years prior when the two home-brewing enthusiasts began experimenting with what would become the brand’s signature Toasted Lager.

At the time, Burford and Cotter maxed out credit cards and used their homes as collateral to secure loans for fermentation tanks, a brew kettle and other equipment secondhand.

Anheuser reportedly paid $24 million for the company in 2014. Anheuser, based in St. Louis, is owned by Belgium-based multinational AB InBev.

Blue Point operated out of a small industrial space along River Avenue in Patchogue for 20 years before constructing and moving into its much larger $40 million headquarters on the old Briarcliffe site in 2018.

Industry challenges

The craft beer industry has faced challenges in recent years, industry observers said, potentially explaining at least in part Anheuser’s decision to sell. 

The transaction also comes on the heels of a conservative backlash and boycott against the beer giant's Bud Light brand for using a transgender influencer in a promotion. The company said last week that its U.S. revenue fell 10.5% in the second quarter. 

Benj Steinman, editor at Beer Marketer's Insights, told the St. Louis Post-Dispatch that the deal signals that both the craft industry and Anheuser have been seeing challenges in the market.

"It's a different moment for craft beer," Steinman said. "It's not the shiny new toy, not the growth engine it once was. It's not as attractive of a [market] segment."

The craft beer space has also grown more competitive over the last decade, data shows.

The number of craft brewers has exploded since the time of Blue Point’s first acquisition, growing from 4,803 breweries in 2015 to 9,552 in 2022, according to figures from the Brewers Association, an industry trade group.

Despite that saturation, Bart Watson, chief economist for the Brewers Association, said Tilray’s purchase shows interest in the craft beverages remains strong.

“There’s a reason that Tilray is choosing to invest here as opposed to other sectors,” Watson said in a statement.

“While distributed craft [beer]  has faced headwinds in the past few years, Tilray’s continued investment in craft — and statements suggesting they plan to continue those investments — reflect a belief in the long-term growth potential of the segment.” Watson said.