Big Alcohol Begins to Test Cannabis Waters

Big Alcohol Begins to Test Cannabis Waters

If you can't beat 'em, join 'em. That appears to be the new approach the alcohol industry is taking towards legal cannabis after years of opposition due to the perception that the plant is a big competitor of beer, wine, and spirits. Molson Coors Brewing Company announced this week it would be partnering with The Hydropothecary Corporation (HEXO) to bring non-alcoholic cannabis-infused beverages to the Canadian market. This comes after Constellation Brands, the behemoth behind Corona and SVEDKA, saw big profits after its acquisition of nearly 10 percent of Canadian licensed cannabis producer Canopy Growth last year.

“While we remain a beer business at our core, 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,” said Molson Coors Canada president and CEO Frederic Landtmeters, in an interview with The Toronto Star.

The venture will be a stand-alone startup with its own board and management team, with Molson Coors Canada having a 57.5 percent interest. The company noted it has no plans to distribute marijuana-infused beverages in the United States. However, should countries outside of Canada be interested in the products, they could be exported in the future.

Molson Coors and Constellation aren't the only alcohol companies getting a piece of the cannabis “green rush”. In May, Great North Distributors, Inc., a subsidiary of Souther Glazer's Wine & Spirits, landed a deal with Canadian producer Aphria, becoming the exclusive distributor of adult-use cannabis products when legal sales begin in Canada on October 17th.

“With this agreement, Aphria has established an unparalleled sales network, and will hit the ground running from the very first day of legal adult-use sales,” said Jakob Ripshtein, Chief Commercial Officer of Aphria, in a press release. “Great North Distributors provides us with an experienced, dedicated team with a proven track record of driving sales and exceptional performance across all provinces. This deal will ensure that Aphria’s brands and products are proudly represented by cannabis retailers throughout the country.”

Big Alcohol has been shifting its attitude towards the booming legal cannabis market; last month, the Wine & Spirits Wholesalers of America (WSWA), a Washington, D.C. trade group that lobbies on behalf of distributors and brokers nationwide announced it was officially endorsing a state's right to legalize adult-use marijuana, becoming the first such group to do so.

“Eight decades ago, Americans acknowledged that the Prohibition of alcohol was a failed policy,” Dawson Hobbs, the WSWA’s acting executive vice president of external affairs, said via a press release. “The state-based system of regulation, adopted after Prohibition, created a U.S. beverage alcohol market that is the safest, most competitive and best regulated in the world.”

David Kani is an Orange County business lawyer and partner at Hochfelson & Kani, LLP. Kani’s first book Pot Inc. - An Entrepreneur's Guide to the Marijuana Industry is set for late 2018. To book or learn more, contact [hidden email].

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