Recreational marijuana/cannabis is scheduled to become legal in Canada on Oct. 17, marking a sea change in cannabis law, and the country’s largest beer maker has no intention of being left behind by the emerging new market. Molson Coors Canada looks to make a splash in the new pot market through a new venture with a cannabis company, creating a line of non-alcoholic, THC-infused products, starting with drinks. They won’t be arriving right away, as edible products are scheduled to remain illegal until further government regulations are passed in 2019, but it’s still quite the precedent to see a company as large as Molson Coors planning their own line of THC drinks.
The joint venture with The Hydropothecary Corporation, branded as HEXO, will result in a new “stand-alone startup” with its own board and management team, with Molson Coors Canada possessing 57.5 percent of ownership, and HEXO holding the rest.
“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 this context, it’s safe to say that “new experiences” means “getting legally stoned on carbonated water,” akin to the product line that Lagunitas is launching in California, in the U.S.
Of course on some level, the sideways move might cut into Molson Coors’ own business. All available data has suggested a significant reduction in beer consumption in areas that have access to legal cannabis—a simple trading of one depressant for another. Regardless, the company is planning on exploring the entire range of possibilities possible with cannabis products, including going beyond just THC.
“We’re going to start with THC but also CBD and then CBG,” said Hexo CEO Sebastien St. Louis. “There’s a lot of these molecules that could do different things so it’s not only about disrupting in the psychoactive market but also in going into wellness markets, appetite control and all sorts of other interesting markets.”
One place that won’t be receiving any of these THC-infused products is the U.S., where international shipping of narcotics is too complicated a venture to make reasonable, at least for the forseeable future. Still, as the global market for cannabis swells past $150 billion, including $7.8 billion in Canada this year, who’s to say what the future could hold?
“There is a paradigm shift underway and cannabis has the potential to provide answers to the alcoholic drinks industry’s existential questions,” said Spiros Malandrakis, head of alcoholic drinks at Euromonitor International.