With key members of Humble & Fume (CNSX: HMBL) management and advisory team having come from Big Alcohol positions from the past, the recent financing with Green Acre Capital Distribution makes sense. The deal ropes in Johnson Brothers—a Top 5 wine, spirits and beer distributor in the United States—through First Option terms which grant Johnson Brothers has the right to acquire the Humble equity once cannabis has been sufficiently federally legalized in the United States. We speak again with Executive Chairman Shawn Dym on why this association with Johnson Brothers is a catalyzing event for the company.
Although beverage-cannabis crossover deals have been well established to date—with the likes of Anheuser Busch InBev’s partnership with Tilray and Constellation Brands stake in Canopy Growth—the market is certainly big enough for smaller entrants. Assuming U.S. federal legalization takes place, the market for cannabis products in expected to grow from approximately $20 billion today to $100 billion by 2030.
Another licensed producer to enter the alcohol product and distribution space is Aphria Inc. A little over a year ago, the company purchased SweetWater Brewing Co. for $300 million—$250 million in cash and $50 million in stock— giving them a foothold into the U.S. market that is currently off-limits to Canadian cannabis.
Although that deal had a differentiator that netted Aphria an actual craft beer brand, it is believed a primary motivator to purchasing SweetWater was for backdoor entry into cannabis brand distribution once federally legal. This is not dissimilar to the mindset behind Humble & Fume’s association with Johnson Brothers—to establish a cannabis-alcohol brands portfolio nexus in the undefined future is entrenched.
Speaking on last week’s announcement, Shawn Dym elucidated on the primary benefits of partnering with Johnson Brothers, which is the gateway to rapid U.S. expansion when regulations allow:
This is a tremendous announcement. If I look back at when we first started conversations with the Johnson Brothers, this is sort of like six or seven months in the making. I think what’s very important for the company and it’s shareholders is that this really gives us a platform to launch our cannabis distribution business in the U.S.
Click on the embedded link to watch our follow-up interview with Humble & Fume Executive Chairman, Shawn Dym, in his own words.