In a move that cements the brand’s association with cannabis, Atlanta-based SweetWater Brewing Company has been purchased by Canadian cannabis firm Aphria Inc. for $300 million. The acquisition was announced Nov. 4 and is expected to close by the end of the year, Bloomberg reports. Private equity firm TSG Consumer Partners, which has owned a minority share in the brewery since 2014, will exit the partnership. 
SweetWater, which brews cannabis-themed beers including 420 Extra Pale Ale, the 420 Strain Series, and Hop Hash Easy IPA, was the 14th-largest brewery in the U.S. in 2019, per Brewers Association data, producing 261,000 barrels last year. The brewery also hosts an annual music festival called 420 Fest in downtown Atlanta; the event draws between 50,000-60,000 attendees each year.
Aside from these natural business connections, the deal indicates a new direction for mergers and acquisitions in the beer world: The buyer is not a beverage alcohol company, and Aphria values SweetWater as a lifestyle brand more than simply a brewery. In a press release, Aphria stated that “SweetWater’s portfolio of beer brands including the Flagship 420 Brand [sic], aligns with the cannabis lifestyle and provides a scalable platform for expansion into the U.S. and Canada.” SweetWater represents Aphria’s first purchase of a beverage alcohol producer.
Ownership of SweetWater gives Aphria a foothold in the American market as five more states legalized recreational and/or medical marijuana through ballot initiatives this November; Aphria’s chairman and CEO Irwin D. Simon told Brewbound SweetWater will also help the company launch THC- and CBD-infused beverages in Canada. 
While some media outlets touted the acquisition as a “first of its kind” in craft beer, there’s been plenty of activity between larger beverage companies and the Canadian cannabis industry for years. Constellation Brands took a nearly 10% stake in Canadian cannabis firm Canopy Growth Corporation in 2017; in 2020, it increased its share to 38.6%. In 2018, Anheuser Busch InBev formed a “research partnership” with Canada’s Tilray Inc. to explore non-alcoholic cannabis beverages. Truss Beverage Co., a joint venture between Molson Coors Beverage Company and HEXO Corp, launched its inaugural five non-alcoholic, cannabis-infused beverages in Canada in August. 
With its purchase of SweetWater, Aphria gains technical insight into cannabis-adjacent beverage production with some research and development on the side. SweetWater currently produces a line of beers brewed with terpenes specific to the famously potent G13 cannabis strain, which includes its third-best-selling brand, 420 Strain G13 IPA. Additionally, SweetWater sells a hard seltzer line called Hydroponics infused with terpenes.
But more relevant during a pandemic, when alcohol sales have shifted dramatically toward retail chains, SweetWater provides a rare opportunity to buy into a brewery with a significant retail footprint. The brewing company distributes its beers to 27 states, and with a new influx of cash and support, could have an opportunity to expand as it leans further into the shared cultural and marketing structure of its new parent company.
That’s key for now. For the future, there’s more. As cannabis expands its legal availability across the U.S., Aphria now has a logistical foundation for quickly launching and scaling cannabis products under a brand Americans already know. 
“If you already have a cannabis-based beverage company with $66 million in [annual] sales, you have a good start,” says Brent Williams, founder and CEO of Highwater Financial, an investment bank and asset management firm for the cannabis industry. 
He’s referring to SweetWater, but assumes the growth potential Aphria sees in the brewery will go beyond beverages. “It’s really easy to use your beverage jumpoff as your entry into the product market. Just because SweetWater is a beverage company now doesn’t mean they can’t come up with ‘Sweetwater Cannabis Company’ with a full vertical of products.”
All together this makes the acquisition a smart move for Aphria, but from SweetWater’s perspective, the time was right to sell. SweetWater’s portfolio of brands jumped 15% in retail chains tracked by market research company IRI in 2017 (up to $74.4 million), grew another 5% in 2019 ($78.2 million), but has stalled this year. Despite other regional breweries of SweetWater’s size mostly seeing increased sales in 2020, as shoppers have bought familiar, readily available beer brands during COVID-19, SweetWater’s sales in grocery, convenience, liquor, and other chain stores are on pace to drop -2%. 
A brewery immersed in cannabis culture with slowing sales makes SweetWater a lucrative investment for Aphria: Besides Lagunitas, it’s perhaps the brewery American drinkers most associate with cannabis. Two of its three most successful beers have “420” in the name: Along with its IPA, 420 Extra Pale Ale and 420 Strain G13 IPA together make up 70% of the brewery’s year-to-date sales tracked by IRI. 420 Extra Pale Ale is responsible for 32% of those sales. 
The brewery’s Hydroponics seltzer line, meanwhile, sold in variety packs, brought in a modest $1.6 million year to date through Oct. 25. That’s not far behind the $2 million in sales Ashland Hard Seltzer brought in, and Ashland investors are eager to accelerate the brand with a goal of selling 2.3 million cases in 2021.
If Aphria sees potential to further expand into the flavored malt beverage (FMB) market, SweetWater has already paved the way. Records from the U.S. Patent and Trademark Office (USPTO) indicate that SweetWater applied in September 2019 to trademark “420” when associated with the category of hard seltzer. That trademark—considered a live application under review by the USPTO—probably isn’t worth the $300 million Aphria paid for SweetWater alone, but if legal cannabis and hard seltzer continue their growth trends, those three little numbers could prove quite valuable. 
Meanwhile, as GBH’s Bryan Roth noted in a recent Sightlines Premium analysis of the CBD beverage market, Beverage Marketing Corporation expects CBD-infused beverages alone to be a nearly $2 billion segment by 2026; total CBD products are expected to triple in dollar sales over the next five years. Last year, 14% of Americans reported having used CBD products, commonly to treat anxiety or pain. 
And that doesn’t take into account the potential for THC-infused beverages, which just gained further legal protections in several states this month. Currently, 15 states, two territories, and Washington, D.C., have legalized cannabis for recreational use, while 34 states and two territories allow medical marijuana.
Highwater Financial’s Williams doesn’t believe cannabis beverages will be the massive market others expect, noting that in states where recreational cannabis has been legal longest, beverages remain the smallest and slowest-growing product segment.
But Williams says that even if cannabis beverages remain a relatively small market, SweetWater is positioned to dominate it.
When it comes to cannabis-adjacent products, SweetWater already has a track record of success—and in the U.S. South, no less. Williams grew up in North Carolina and recalls his time as a bartender there, when bars and retailers, even distributors, wouldn’t carry SweetWater beers because of the stoner references.
“They’ve already had the ability to overcome the objections and build the brand trust and loyalty,” he says. “In the South, in the Bible Belt, they’re already a successful cannabis brand.”
Words by Kate Bernot

Back 40 Launches with Three Distinct Vape Strains – Super Lemon Haze, Forbidden Fruit and Kush Mint – Available Now at Cannabis Retailers Across Canada Back Forty Cartridges Back Forty cannabis vapes, launching with three distinctive strains.TORONTO, Oct. 13, 2020 (GLOBE NEWSWIRE) — Turn off your notifications and escape to the Back Forty, a new cannabis brand all about embracing simplicity and getting back to the basics. The latest brand from Auxly Cannabis Group (TSX.V – XLY) (“Auxly”), Back Forty launches today with three unique SKUS of distinct high-potency vapes, available at cannabis retailers in British Columbia, Alberta, Ontario and New Brunswick, with more provinces to follow in coming months. “Back Forty refers to the most remote part of a farm, the place where I imagine a farmer would go to get away from the day-to-day and connect with the peace and quiet of nature,” said Brad Canario, Brand Director, Back Forty. “We’re thrilled to introduce this brand, designed for savvy cannabis consumers looking for an uncomplicated, high-quality product at an affordable price. Take a trip in the Back Forty!”Back Forty keeps it simple, so all Back Forty vapes contain only two ingredients – rigorously tested cannabis distillate and botanical terpenes. Each 0.45 g cartridge contains 360 mg of THC, with no CBD. At launch, Back Forty is introducing the following strains: * Super Lemon Haze is a Sativa packing a citrus and floral taste, with botanical terpenes of d-limonene, terpinolene, myrcene and caryophyllene. * Forbidden Fruit is an Indica with citrus and earthy taste notes from d-limonene and myrcene botanical terpenes. * Kush Mint is a Hybrid with a refreshing burst of mint taste, with menthol and d-limonene botanical terpenes. About Back Forty         Back Forty is a cannabis brand wholly owned by Auxly Cannabis Group Inc. Through simple, uncomplicated cannabis products, Back Forty invites Canadians cannabis consumers to embrace the freedom of the outdoors. Back Forty cannabis vapes are processed and manufactured with precision and care at Dosecann in Charlottetown, Prince Edward Island. Learn more at and stay up-to-date at Twitter: @back40cannabis; Instagram: @backfortycannabis; Facebook: @back40cannabis.About Auxly Cannabis Group Inc. (TSX.V: XLY) (OTCQX: CBWTF)         Auxly is an international cannabis company dedicated to bringing innovative, effective, and high-quality cannabis products to the medical, wellness and adult-use markets. Auxly’s experienced team of industry first-movers and enterprising visionaries have secured a diversified supply of raw cannabis, strong clinical, scientific and operating capabilities and leading research and development infrastructure in order to create trusted products and brands in an expanding global market.Learn more at and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.For more information please contact: Scott Campbell, 647-402-4957, Notice Regarding Forward Looking Information:This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: consumer preferences, political change, future legislative and regulatory developments involving cannabis and cannabis products; and competition and other risks affecting Auxly in particular and the cannabis industry generally.A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information in this release including, but not limited to whether: there is acceptance and demand for Back Forty products by consumers and provincial purchasers; and general economic, financial market, regulatory and political conditions in which Auxly operates will remain the same. The forward-looking information in this release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. Readers should not place undue reliance on forward-looking information contained in this release. The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.A photo accompanying this announcement is available at

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