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Hold Your Beer: Molson Coors Is Getting Into Cannabis

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Hold Your Beer: Molson Coors Is Getting Into Cannabis

Molson Coors Brewing Co (NYSE: TAP) and The Hydropothecary Corporation, a Canadian cannabis producer, announced the formation of a joint venture Wednesday to develop non-alcoholic, cannabis-infused beverages.

Why It’s Important

It was reported in June that Molson Coors was in talks with several Canadian marijuana companies about such a deal.

One source had told reporters that Molson Coors was seeking “a high quality product that isn’t going to embarrass them” and assurance of a cannabis supply high enough to sustain such a drink.

Other companies that were reportedly in the running included Aphria Inc. (OTC: APHQF) and Aurora Cannabis Inc. (OTC: ACBFF).

As brewers have watched sales decline in both the American and Canadian markets, expanding into the cannabis space could be a way to make up for lost growth over the long-term. Although alcohol and cannabis are often considered substitute products, the cannabis market is just in its emerging stages.

What’s Next

Hydropothecary CEO Sébastien St-Louis said in an interview that the companies had yet to place a dollar value on the cannabis-infused beverage market, but expect future revenue from the JV to be “massive.”

The new company will operate with its own management team and board, but with Molson Coors holding a controlling 57.5-percent stake. The deal is expected to close by the end of September.

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Posted-In: marijuana pot The Hydropothecary CompanyCannabis News Emerging Markets Contracts Markets Best of Benzinga

 

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