Molson Coors Canada is seeking to disrupt the country's beverage industry by entering into a joint venture to develop non-alcoholic cannabis-infused products that could give it a leg up as more countries legalize the narcotic.
The deal is expected to close before September 30, just ahead of the proposed legalization of recreational marijuana in Canada.
Pot edibles are expected to become legal in 2019. The Molson-HEXO deal is structured as a standalone start-up company, complete with its own management team and board of directors.
Recreational cannabis will become legal across Canada on October 17th, and the clock is ticking.
He said the marijuana industry could fuel alcohol's next growth cycle or instead suffocate an industry already on the defensive. "As two leading companies who share a track record of excellent practices, as well as respect for law and regulations, (Hydropothecary) and Molson Coors Canada have established a relationship built on trust, and together we will develop responsible, high-quality cannabis-infused beverages for the consumable cannabis market in Canada".
Molson Canada is the Canadian arm of beverage giant Molson Coors Brewing Company (NYSE:TAP)(TSX:TPX), and HEXO is a recognized leader in Canadian medical cannabis.
The move follows an announcement past year by Constellation Brands, which revealed it would will pay CAD 245 million ($191 million) for a 9.9% stake in Canopy Growth Corporation, a Canadian supplier of medicinal marijuana, paving the way for it to launch a series of cannabis-infused alcoholic drinks.
The Hydropothecary Corporation partners with Molson Coors, sending the cannabis company's stock skyrocketing on both the Canadian and American markets today. Constellation Brands, the beer giant behind Corona, paid $191 million for a 9.9% stake in Canopy Growth, a Canadian marijuana producer, in October of previous year. Its stock rose about seven per cent to $5.30 in morning trading on the Toronto Stock Exchange after the deal was announced.
The Molson Coors brewery in Montreal.
"Although the industry faced another tough quarter due to a challenging April as well as the impact of holiday mismatches, we are dissatisfied with our overall market share trends and we will continue to focus on reinvigorating Coors Light while maintaining the strong improvements in Miller Lite and continuing to accelerate our performance in above premium to improve both top and bottom line results", Hunter said. For the three months ending June 30, the company reported more than $2 billion in U.S.net sales, down 3.1 percent compared to 2017 levels.
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