Authentic Brands and Tilray Announce Joint Venture to Market and Distribute Cannabis Products

Paul, Weiss is representing Authentic Brands Group (ABG) in a long-term revenue sharing agreement with Canadian pharmaceutical and cannabis company Tilray, Inc. to market and distribute a portfolio of consumer cannabis products within ABG’s brand portfolio in jurisdictions where regulations permit. Tilray is a global pioneer in cannabis production and distribution; ABG is an owner of a portfolio of global lifestyle and entertainment brands.

Under the terms of the agreement, the parties will leverage ABG’s portfolio of brands to develop, market and distribute consumer cannabis products around the world, where legal, with an immediate focus on opportunities in Canada and the U.S., subject to applicable and brand-appropriate regulations. Tilray will be the preferred supplier of active cannabinoid ingredients for such products. Tilray will initially pay to ABG US$100 million and up to US$250 million in cash and stock, subject to the achievement of certain commercial and/or regulatory milestones. Tilray will have the right to receive up to 49 percent of the net revenue from cannabis products bearing ABG brands, with a guaranteed minimum payment of up to US$10 million annually for 10 years, subject to certain commercial and/or regulatory milestones.

The Paul, Weiss team includes corporate partners Adam Givertz and Lindsay Parks; and intellectual property partner Chuck Googe.