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Molson Coors chases the buzz with joint marijuana venture

Published:  02 August, 2018

Molson Coors is the latest mega-brewer to announce plans to make hybrid beverages with one of Canada’s leading cannabis producers, further signalling the march of smoke products into the alcoholic sector.

The Canadian arm of the American beer brewer has officially entered into an agreement with The Hydropothecary Corporation, makers of recreational marijuana product Hexo, to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market.

Recreational marijuana use in the country will be legal from 17 October 2018, with edible and drinkable cannabis products expected to be legalised by 2019.

In a statement the company said it was keen to enter the “fast-growing cannabis sector” especially in Canada where it is “breaking new ground”.

Molson Coors is the second largest beer company in Canada and the US and the fifth globally, with Anheuser-Busch InBev and Heineken in first and second place.

The news comes as the company reports another quarter of weak beer sales, while legal marijuana sales in 2018 will total US$7.5 billion in Canada and $10.2 billion in the US where 29 states have legalised recreational use (Euromonitor International).

It isn’t alone in looking to the leaf for future growth.

Last year, Corona brewer Constellation Brands made the first move via investment in Canadian medical cannabis producer Canopy Growth, with whom it is currently producing hybrid beverages.

Meanwhile Heineken’s Lagunitas brand this week launched a cannabis-infused sparkling water in California.

Frederic Landtmeters, president and CEO of Molson Coors Canada referred to consumer need for “high-quality products that meet their evolving drinking preferences” as cannabis is being widely tipped as the next big make-or-break challenge facing the alcohol industry.

Spiros Malandrakis, alcoholic drinks industry manager at Euromonitor International, said: “The marijuana industry could fuel alcohol’s next growth cycle or instead suffocate an industry already on the defensive.”

The new joint venture further signals the end of “knee-jerk antagonism” of the alcoholic industry to the cannabis, he added.

However, while parts of the alcohol industry now acknowledge the potential dangers to penetration rates and profitability of BWS, many still fail to see the huge potential for the development of hybrid products.

Comparing it to the disruption caused by the craft beer movement, Malandrakis said: “Fighting the surging green tide will become an expensive exercise in futility. Ignoring it will guarantee the belated, panicky, knee-jerk reactions that greeted the craft juggernaut once it had already established offensive positions at the macro brewers’ gates. Cannabis can indeed cross-pollinate and, ultimately, become the fertiliser for radical innovation and experimentation.”