Molson Coors Enters Into Deal with HEXO to Create Cannabis Infused Drinks

Molson Coors Hydropothecary Partnership: There had been speculation on what cannabis company Molson Coors Brewing Co. (NYSE:TAP) would partner with to launch its new line of cannabis-infused beverages. Aurora Cannabis (TSX:ACB) and Aphria (TSX:APH) had reportedly been in talks with the brand but today, the alcohol drink maker put all rumors to bed by announcing a new deal with Quebec-based marijuana cultivator The Hydropothecary Corporation (TSE:HEXO).

HEXO stock is seeing a rise today after the news broke. 

Molson Coors Hydropothecary Partnership

Molson Coors Hydropothecary Partnership: A New Venture

But it's not just a deal, the pair has gone one step further with the decision to launch a standalone start-up with its own board and management team. A name has yet to be disclosed but the business split will be as follows: Molson Coors will have 57.5% interest and Hydropothecary will have the rest.

A Change of Direction

Molson has said that the drinks will be non-alcoholic, a seemingly trendy decision across the cannabis-infused beverage industry; recently, Province Brands announced it was brewing a beverage that used the entire cannabis plant in an industry first. It too claims to be non-alcoholic. 

But any avid Coors drinkers need not fret; their beloved beer company is not completely changing winds, CEO and president Frederic Landtmeters reiterated that the company will remain "a beer business at [its] core."

Yet he also expressed excitement at the agreement by continuing: "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." 

Recreational marijuana will become legal across Canada come October 17th. But the law is still not set to include edible products infused with marijuana until specific government regulations are rolled out in 2019.

>> California Separates Alcohol and Marijuana Consumption

The Hydropothecary Corporation is based in the Canadian province of Quebec and has more than 300,000 square feet of production capacity with an expansion to treble that size, due for completion by the end of 2018. 

The joint venture has not been officially closed yet as it remains subject to various approval conditions but confirmation should arrive before September 30th. 

"We are excited about this partnership with Molson Coors Canada [...] as we embark on the journey of building a brand new market," added HEXO CEO and co-founder Sebastien St-Louis.

Watch this space, folks! Cannabis-infused beverages are expected to be a massive market.

Featured Image: Freepik

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