Tilray: Acquisition of Craft Brew Brands From Anheuser-Busch Sends Shares Up 36% Despite Few Details

No-moat Tilray announced the acquisition of eight craft brewery brands from beer giant Anheuser-Busch. Although few details were provided, shares skyrocketed an astounding 36% on the news. As we do not have enough information to incorporate the beer additions in our model, we cannot justify the market reaction. Indeed, we don’t plan to change our fair value estimates of $5.50 and CAD 7 per share until further information is released. We think there are few synergies across beer and cannabis but do think that additional profitable businesses could help the company scale overhead expenses. Even excluding the beer additions, shares still look undervalued for the only profitable Canadian cannabis licensed producer we cover.