Sam Adams Says Hold My Beer — And You Are: Sales Numbers Dispute Cannabis Cannibalization Narrative

Sam Adams maker Boston Beer Co SAM isn’t seeing its cannabis-infused beverage segment tap revenue from its flagship lager.

What Happened: The company disclosed its financial results for the first quarter, which ended on March 30. Its performance exceeded analyst expectations, too.

• The company reported a net revenue of $426.1 million
• That’s more than 3.1% higher than analyst estimates of $413.21 million.
• Earnings per share (EPS) of $1.04 was above the analyst estimate for EPS of 9 cents.

Sam Adams likely owes some of its success to the backlash Anheuser-Busch Inbev BUD faced from conservative beer drinkers. The Bud Light parent company saw sales plummet on the heels of a promotional campaign with transgender influencer Dylan Mulvaney.

THC’s so-called cannibalization of alcohol doesn’t seem to resonate at Sam Adams, nor does it track at Tilray Brands Inc. TLRY. The Florida-based cannabis company, which purchased craft beer brands from AB Inbev, saw alcohol revenue spike 117% to $47 million.

See Also: 3 Beer Stocks — What This Analyst Thinks Is Brewing

Why It Matters: Even before Boston Beer first entered the cannabis beverage market, industry analysts (i.e., Deloitte) predicted that alcohol and tobacco companies would utilize M&A or establish new product segments “to avoid losing market share to competing cannabis products.”

But, as it turns out, Boston Beer’s customers are still enjoying Sam Adams in addition to new THC-infused items such as Teapot.

Teapot, the 40-year-old company boasts, is Canada’s premier cannabis tea brand. The company did not disclose THC beverage sales numbers in its most recent financial report.

"We saw a unique opportunity as consumer relationships with alcohol evolve, especially in a post-COVID world, where cannabis acceptance is on the rise. This convergence of trends led us to create cannabis-infused beverages," Paul Weaver, head of cannabis at Boston Beer, told Benzinga last year.

Teapot is not listed among Boston Beer’s so-called “core brands” (Sam Adams, Angry Orchard Hard Cider, Dogfish Head, Truly Hard Seltzer and Twisted Tea).

Boston Beer also backs Uncle Arnie’s, a cannabis-infused beverage startup.

Other beer giants aren’t bullish on the THC drink segment. Molson Coors Beverages Co. TAP, for example, exited a cannabis-related joint venture with HEXO Corp. in 2022.

Now Read: Boston Beer Exec Wants To Turn Time-Tested Liquor Logic Into Cannabis Retail Gold

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