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Tilray shares surge after announcing $100 million deal with AB InBev to study cannabis-based drinks

Key Points
  • Tilray entered a $100 million joint venture with beer brewer AB InBev to study THC and CBD beverages.
  • The news follows after Tilray announced a separate deal Tuesday with Novartis' Sandoz to produce and distribute medical cannabis products.
Brendan Kennedy, CEO, Tilray
Scott Mlyn | CNBC

Canadian cannabis company Tilray entered a $100 million joint venture with beer brewer AB InBev to study cannabis-based beverages, the companies announced Wednesday.

The partnership is limited to Canada, and the companies will make decisions about commercializing the products in the future. Shares of Tilray jumped as much as 19 percent after hours. The joint venture, in which both companies will invest $50 million each, will study non-alcoholic beverages containing THC, the psychoactive chemical compound in marijuana, as well as CBD, the non-active chemical.

Brewers have started dabbling in the cannabis space as interest grows and regulations ease. Constellation Brands, which sells Corona and Modelo in the U.S., has invested $4 billion in Canopy Growth, Canada's largest medical marijuana producer. Heineken's Lagunitas brand introduced a cannabis-infused drink in California this summer.

AB InBev's Canada-based subsidiary, Labatt Breweries, will be involved in the Tilray partnership.

"Labatt is committed to staying ahead of emerging consumer trends," Labatt Breweries President Kyle Norrington said in a statement. "As consumers in Canada explore THC and CBD-infused products, our innovative drive is matched only by our commitment to the highest standards of product quality and responsible marketing."

The deal is the latest Tilray has inked. On Tuesday, Tilray announced a partnership with Novartis unit Sandoz to produce and distribute medical cannabis products. News of the deal sent Tilray shares soaring as much as 22 percent. They fell more than 6 percent Wednesday.

The deal is the latest Tilray has inked. On Tuesday, Tilray announced a partnership with Novartis unit Sandoz to produce and distribute medical cannabis products. News of the deal sent Tilray shares soaring as much as 22 percent. They fell more than 6 percent Wednesday.

Correction: THC is the psychoactive chemical compound in marijuana. A previous version of this story misstated its properties.