Molson Coors Forms JV with Canadian Cannabis Company, Shares Q2 Results

Molson Coors Forms JV with Canadian Cannabis Company, Shares Q2 Results”

Molson will own 57.5 percent of the venture, while Hydropothecary holds 42.5 percent.

In May, marijuana producer Aphria Inc. said it has reached a deal that will see Southern Glazer's Wine & Spirits to become its exclusive distributor of recreational cannabis products in Canada. Construction is scheduled to be completed by year's end.

"The cannabis revolution is in full swing while the alcohol industry appears to be largely sitting on the fence, drink in hand, occasionally throwing crumpled cans in the general direction of the ongoing legalization debate", alcoholic drinks industry analyst Spiros Malandrakis told The Drinks Business.

"The new company will combine the proven beverage experience of Canada's leading brewer with a recognized innovator in the fast-growing cannabis sector to explore the highly anticipated consumable cannabis market, which is expected to be legally permissible in Canada in 2019", said Molson Coors.

Molson Coors Brewing Co. has announced that its Canadian unit has signed a deal to help it develop cannabis-infused drinks in Canada.

These deals appear to be hedges against falling alcohol sales where legal cannabis has been introduced.

Watch news, TV and more on Yahoo View. "Our full year underlying cost savings and free cash flow guidance has not changed, despite ongoing industry demand challenges in the United States and Canada and inflationary pressures".

In February, Aurora Cannabis bought a stake in Liquor Stores N.A., which has since changed its name to Alcanna.

Recreational marijuana is set to become legal in Canada on October 17, but edible products infused with pot - including beverages - will remain illegal until specific government regulations are rolled out in 2019 at the earliest.

Hunter added the JV with HEXO, which now operates a 300,000 sq. ft production space and is expected to complete a 1 million sq. ft. expansion before the end of the year, is another piece in the company's overall strategy to grow and diversify its non-alcoholic portfolio, which includes investments in Clearly Kombucha and ready-to-drink chai tea maker Bhakti Inc.

The joint venture is subject to various approvals conditions and is scheduled to close before September 30. According to Yahoo Finance, HEXO closed the day at $4.83 a share, up $0.48 (+11.03%).

The Molson Coors brewery in Montreal.

Hunter added: "We were pleased with the sequential improvements in the second quarter for top and bottom line results". For the three months ending June 30, the company reported more than $2 billion in sales, down 3.1 percent compared to 2017 levels.

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