Canada/USA: AB InBev to enter cannabis drinks market

AB InBev is to enter the market of cannabis infused drinks. The world’s leading brewer announced today a partnership with “Tilray, a global pioneer in cannabis production and distribution, … to research non-alcohol beverages containing tetrahydrocannabinol (THC) and cannabidiol (CBD).” The partnership is limited to Canada and decisions regarding the commercialization of the beverages will be made in the future.

AB InBev’s participation will be through its subsidiary Labatt Breweries of Canada, and Tilray’s participation will be through its Canadian adult-use cannabis subsidiary High Park Company, which develops, sells, and distributes a portfolio of socially responsible cannabis brands and products in Canada. Each company intends to invest up to $50 million USD, for a total of up to $100 million USD.

Canada legalized the use of marijuana in October, and adults are allowed to buy, use, possess and grow recreational marijuana.

AB InBev is the last of the four big North American brewers to enter this market. AB InBev’s CEO Carlos Brito said in an interview in June that “Cannabis is still something that we as a company are trying to learn more about. It’s going to be regulated, it’s going to be commercialized. But, it’s still a very restricted business and, in most places, it’s not legal.”

In October 2017, Rob Sands, at that time Constellation Brand’s CEO, said in an interview that the company bought in a deal was worth C$245 million (US$191 million) a 9.9% minority share in the C$2 billion Canadian medical marijuana company Canopy Growth (inside.beer, 30.10.2017). The stake was 10 months later increased to 38% (inside.beer, 15.8.2018).

Molson Coors Brewing reported the same months that their Canadian business unit Molson Coors Canada started a joint venture with Hydropothecary Corp. (inside.beer, 2.8.2018), a medical marijuana company based in Gatineau, Quebec, which was later renamed to HEXO Corp. Two months later both companies released a press statement saying they had formed a joint venture, called Truss Beverages Co., to develop non-alcoholic, cannabis-infused beverages for the Canadian market (inside.beer, 16.10.2018).

Also Heineken, number 4 in the US beer market, launched on July 30 a marijuana-based product through its Lagunitas craft beer brewery. Called Hi-Fi Hops, Lagunitas' cannabis drink is made with marijuana instead of alcohol and contains THC, the main psychoactive ingredient in marijuana.

“We intend to develop a deeper understanding of non-alcohol beverages containing THC and CBD that will guide future decisions about potential commercial opportunities,” said Kyle Norrington, newly named President, Labatt Breweries of Canada. “We look forward to learning more about these beverages and this category in the months ahead.”

“We are delighted to be joining forces with a world-leading beverage company, AB InBev, to research how to create enjoyable cannabis beverage products,” said Brendan Kennedy, CEO of Tilray.

 

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