It was big news when Molson Coors Brewing Company announced that it was forging a partnership to brew non-alcoholic cannabis drinks in Canada, but it shouldn’t have been surprising. Alcohol giant Constellation Brands had already invested heavily in the cannabis industry and it shouldn’t shock anyone that big companies, particularly those involved with alcohol and tobacco, will be looking to join a multi-billion dollar market, especially when the new market cuts into their sales.
Molson Coors’ CEO expects that cannabis beverages will be a $3 billion sector in Canada, and the company has warned shareholders that legal cannabis is a threat to beer companies’ profit margins. The North American beer giant plans to sell a variety of cannabis drinks in accordance with Canada’s new regulations, starting on December 16th, the earliest date possible, before moving into the United States, with a line of CBD beverages. Bloomberg reported:
The maker of Coors Light has partnered with Gatineau, Quebec-based Hexo Corp. to make a variety of non-alcoholic, cannabis-infused drinks for the Canadian market. The joint venture, called Truss, will have “lots of different beverages” for sale on Dec. 16, when the beverages become legal in Canada, said Jay McMillan, Hexo’s vice president of strategic development.
Truss plans to offer everything from water to a “beer-like product” and maybe even hot beverages. It has flexible production lines so it can pivot if one type of beverage isn’t selling, he said.
It’s also looking at selling CBD-infused beverages in the U.S., which legalized the non-intoxicating substance late last year, with the goal of having products in eight states by 2020.
While the entry of big alcohol companies into the industry is likely good for consumers who want a multitude of options to best suit their needs and lifestyle, it also provides an opportunity for smaller companies to find their niche. In many ways Molson Coors will serve as a research department for competitors as they put different types of beverages up for sale. After they find products that work, other companies can follow suit and find an avenue that works for them, such as producing and marketing a craft cannabis version, giving consumers the opportunity to support mom-and-pops. It will be very interesting in mid-December when cannabis beverages and other products hit the shelves and to see how the market shakes out over time.
The International Cannabis Business Conference in Vancouver this September 15-16 is the best place to learn the latest about Canada’s regulations and market, and to network with top investors and entrepreneurs. Don’t miss your opportunity, be sure to purchase early bird tickets by August 21st.