It feels like it’s been a while since we’ve been writing about any major acquisitions or buyouts in the craft beer world, especially among larger craft brewers, but here’s one that pretty much makes perfect sense as soon as you read the headline: Atlanta, GA’s SweetWater Brewing Co. has been 100% acquired by a Canadian cannabis company, Aphria Inc. Thematically, it’s right up SweetWater’s alley, considering the company has been using stoner iconography to market its products ever since its founding in 1997, with flagships such as 420 Extra Pale Ale directly referencing cannabis culture in a way so direct that no one could ever miss it.
SweetWater was founded in Atlanta in 1997 by Freddy Bensch, who had visited the city during the 1996 Olympic Games before deciding to put down roots there. At the time, it was one of only four breweries in Atlanta—only one other of which, Atlanta Brewing Co., is still active today. Growth was exponential and furious, especially after the introduction of beloved flagship 420, and SweetWater eventually built itself into the largest craft brewery in the Southeast. Today, by the Brewers Association definition of “craft brewer,” they rank as the 14th largest American craft brewery by volume. And in recent years, much of that growth has increasingly been driven by products even more deeply rooted in cannabis, especially the 420 Strain series, which is infused with terpenes. The brewery is also well known for its annual 420 Fest music festival, which takes place each year on the weekend nearest to April 20. Additionally, its beer is available on every Delta Airlines flight, nationwide.
One might naturally wonder if this acquisition would cause SweetWater to lose “craft brewer” qualification via the much-ballyhooed Brewers Association definition, but in this case it would not. Specifically, SweetWater would remain a craft brewer in the eyes of the BA because Aphria Inc. is itself not a beverage company—thus, SweetWater would still qualify under the “independent” banner, much in the same way as the breweries that joined together in the CANarchy collective, such as Cigar City and Oskar Blues. Notable is the fact that SweetWater had managed to continue growing during the industry’s slowdown—in 2019 they produced 260,420 barrels, an increase of 7% from the year before.
In terms of the deal, Porch Drinking reports that it’s a 100% acquisition for $300 million in cash and stock. It would seem that Aphria looks at the opportunity as a way to soften the marketplace in the U.S. and begin building awareness of its “adult use” cannabis brands (Broken Coast, Good Supply, Riff and Solei), hoping for future national legalization of cannabis.
CEO Freddy Bensch stated the following, regarding the acquisition: “We are excited by the opportunity to join a leading global cannabis company and build a successful future based on the strengths we both bring to this combination. Our 420 brand offerings and SweetWater 420 Fest complement Aphria’s cannabis business and create mutual opportunities for accelerated expansion into other cannabis- and beverage-related products in the U.S. and Canada. We will leverage our growing beverage offering and build an even stronger, more diversified company with a continued focus on authentic and distinctive brands using some of the freshest, most flavorful ingredients to create innovative and high-quality beverages including beers, seltzers, spirits, and non-alcoholic beverages that our loyal and growing consumer base has come to expect from SweetWater.”