Hold Your Beer: Molson Coors Is Getting Into Cannabis

Molson Coors Brewing Co 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. APHQF and Aurora Cannabis Inc. 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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