Molson working to create non-alcoholic drinks infused with cannabis

Lloyd Doyle
August 3, 2018

According to a Wednesday morning press release, the two companies have agreed to form a new joint venture "to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization", which is planned for October 17. The venture will be structured as a standalone start-up company with its own board of directors and an independent management team.

Molson Coors Canada will have 57.5% controlling interest and remaining stake with Hydropothecary, in the joint venture.

Hydropothecary would own the rest.

"While we remain a beer business at our core, we are excited to create a separate new venture with a trusted partner that will be a market leader in offering Canadian consumers new experiences with quality, reliable and consistent non-alcoholic, cannabis-infused beverages", said Molson Coors Canada president and CEO Frederic Landtmeters.

The transaction is expected to close before the end of September.

"We view this as a historic milestone as the Canadian cannabis industry looks for innovative ways to enter the beverage industry", Beacon Securities analyst Douglas Cooper said in a note. Molson Coors will control 57.5% of the now unnamed venture, the company said in a news release. "Visibly intimidated, insular, and inherently conservative, large parts of the alcohol industry acknowledge and highlight the dangers to their penetration rates and profitability, but largely fail to see the huge potential behind the plumes of hazy smoke". Molson Coors will attempt to sell pot-infused drinks in Canada, where consumable marijuana will become legal in 2019.

The Molson Coors Brewing Company is joining the cannabis game. Alcohol giant Constellation Brands Inc., the maker of Corona beer, bought a stake in Canadian pot producer Canopy Growth Corp. last year, and cigarette maker Imperial Brands Plc last month took an equity stake in closely held Oxford Cannabinoid Technologies.

And Lagunitas, a California-based craft beer company owned by Heineken, recently rolled out a cannabis-infused beverage.

The brewer is the latest to capitalize on Canada's decision to legalize recreational marijuana later in the year, a market industry watchers say could be worth $5 billion to $10 billion.

These deals appear to be hedges against falling alcohol sales where legal cannabis has been introduced.

Other reports by Iphone Fresh

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