British Columbia-based cannabis production company Tilray, Inc. (NASDAQ: TLRY) is seeking to expand its global footprint through a newly announced revenue-sharing deal with brand marketing giant Authentic Brands Group.
The terms of the deal will see new marketing strategies developed for Tilray’s CBD and marijuana products where legal in Canada, the U.S., and abroad. Tilray will provide an initial payment to Authentic Brands Group of $100 million in cash to seal the deal.
If undisclosed commercial milestones are achieved through the partnership over time, Tilray will further provide Authentic Brands Group up to an additional $250 million in stock.
In exchange, Tilray is set to net 49% revenue from cannabis products branded by Authentic Brands Group. If undisclosed sales milestones are met over the next 10 years, Tilray is set to automatically receive a minimum of $10 million per year for the coming decade under the terms of the deal.
Tilray’s Chief Executive Officer Brendan Kennedy expressed excitement at the potential for the company to find new customers through expanded brand marketing in the beauty, wellness, and fashion sides of the cannabis industry.
Authentic Grands Group Executive Vice Chairman Daniel W. Dienst also had this to say about the new revenue sharing deal:
The Canadian marijuana juggernaut has been busy expanding into various revenue-sharing opportunities lately, including a deal to collect royalties by assisting in licensing out cannabis dehydration technology with EnWave Corporation (TSX-V: ENW; FSE: E4U).
Tilray also made waves internationally last month when the company announced the formation of an international cannabis advisory board composed of high profile political figures, including former U.S. Republican National Committee Chairman Michael Steele.
Last month, the company also entered into a $100 million agreement with beer manufacturer Anheuser-Busch to develop non-alcoholic beverages infused with THC and CBD for sale in Canada.
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