Molson developing non-alcoholic drinks infused with cannabis

Gatineau's Hydropothecary, Molson Coors launch cannabis drink project

The partnership will be structured as a standalone company with its own board and management team and a chief executive officer is expected to be named within the coming weeks.

Molson Coors Canada will hold a 57.5 percent controlling stake in the stand-alone joint venture.

Hydropothecary would own the rest.

As part of the agreement, Hydropothecary is going to issue share-purchase warrants to Molson, and both companies hope to close the deal before the end of September.

The Hydropothecary Corporation is ramping up its production capacity in advance of Canada's legalization of recreational-use marijuana on October 17, to more than one million square feet. Molson Coors will control 57.5% of the now unnamed venture, the company said in a news release.

He said the marijuana industry could fuel alcohol's next growth cycle or instead suffocate an industry already on the defensive.

In a memo, Euromonitor's head of alcoholic drinks, Spiros Malandrakis, wrote: "There is a paradigm shift underway and cannabis has the potential to provide answers to the alcoholic drinks industry's existential questions".

Molson Coors Canada is headquartered in Toronto and is indeed North America's oldest brewer, with sales that capture about one-third of the total Canadian beer market, selling brands like Coors Light, Belgian Moon, Molson Canadian, and several others.

Beer and alcohol companies are circling Canadian marijuana companies amid falling beer consumption and concerns that the buzzy and soon-to-be legal drug could take a further bite out of booze sales.

Corona beer distributor Constellation Brands Inc. invested $245 million for a 9.9 per cent stake in Canada's largest licensed cannabis producer, Canopy Growth, last year. Molson Coors will attempt to sell pot-infused drinks in Canada, where consumable marijuana will become legal in 2019.

Gatineau, Quebec-based HEXO now operates with more than 300,000 square feet of production capacity with an additional 1,000,000 square feet of expansion set to be completed by the end of the year. Its stock rose about seven per cent to $5.30 in morning trading on the Toronto Stock Exchange after the deal was announced.

Molson Coors Brewing Co Class B (NYSE:TAP) last posted its quarterly earnings data on Wednesday, August 1st. The company reported $1.88 earnings per share for the quarter, beating analysts' consensus estimates of $1.83 by $0.05.

Revenues for the period ended June 30 slipped to almost US$3.1 billion, slightly below expectations.

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