The Canada-based company is going to invest millions in the U.S. company
Authentic Brands Group (ABG), the large U.S.-based company behind brands like Aeropostale, Juicy Couture and Nine West, is getting friendly with a marijuana business out of Canada. Tilray Inc. has announced that it has signed a revenue sharing deal with ABG that will lead to the creation of cannabis-branded products offered by the U.S. giant. Tilray is expected to invest as much as $300 million in the deal.
According to Tilray CEO Brendan Kennedy, the impetus for the investment comes from the belief that consumers are more likely to purchase a “Juicy Couture cannabis-infused gummy,” than “just a gummy. The company adds in a press release that it will be “the preferred supplier of THC and CBD for cannabis-infused products bearing any of the brands in ABG’s portfolio.”
ABG controls more than 50 brands and generates annual retail sales of around $9 billion. The deal gives Tilray access to a huge U.S. market and Kennedy asserts, “The reason we signed this agreement is because we’re getting a global licence to use these very iconic brand names. That fits into our strategy of valuing brands — we believe brands matter and are the future of this industry.”
ABG will receive 51% of the revenue, with Tilray getting the remaining 49%. All products will carry the ABG name, but will be manufactured by Tilray. The agreement also stipulates that there will be a minimum guaranteed payment of as much as $10 million each year for ten years, based on the deal achieving certain milestones.