Dive Brief:
- Molson Coors and cannabis producer Hexoare exploring opportunities for non-alcohol hemp-derived CBD beveragesin Colorado. The joint venture will be called Truss CBD USA and will be majority owned by Molson Coors.
- All production and distribution for Truss will stay in Colorado since the state already has a regulatory framework for hemp-derived CBD in food and beverages. The company said no CBD products will be produced at Molson Coors facilities.
- "CBD beverages are a growing segment within the non-alcohol beverage category and this JV provides us an opportunity to build capabilities in Colorado," Pete Marino, Molson Coors' president of emerging growth, said in a statement.
Dive Insight:
This new partnership in the U.S. expands on one that Hexo and Molson Coors already established in Canada. Two years ago,Molson Coors started a joint venturein Canada with Hydropothecary, now called Hexo,to develop non-alcoholic, cannabis-infused beverages for that market.
The companies have been early movers in the space, forming a partnership well beforeCanada started to allowCBD-infused beverages and edibles on shelves in December.In October, Truss Beverage Co., also the name for the joint venture betweenMolsonCoors Canada andHexo,partnered with Flow Glow Beveragesto make and distributeCBD-infusedspring water in Canada —the first of its six expected cannabis beverage brands.
As Canada has expanded its legalization of CBD products, many are watching progress there to see what the U.S. could look like in the future. And according toa study by Euromonitor, the main market for THC and CBD-infused products is in the alcoholic drink space.
But MolsonCoors isn't the only brewer that partnered with a cannabis company and started in the Canadian market. ABInBevand Canadian cannabis companyTilraypartnered to launchnon-alcoholicCBD-infusedbeverages under the Fluent Beverage brand in Canada after thetwo companies announceda $100 million joint venture to research cannabis-infused non-alcoholic drinks for the Canadian market in 2018.
And Constellation Brandsspent about about $4 billion investing in the world's largest publicly traded cannabis company Canopy Growth, an investment thathasn't yet paid off.
There have been delays with CBD product development in Canada though. Both Fluent Beverage and Trusshave been slowto launch products in the country, whileCanopy Growthhadn't finished scaling upits cannabis beverage production facility in Ontario in time for commercial production.These companies, including Molson Coors, will likely want to work out these issues before they move into other markets like the U.S.
Molson Coors and Hexo said in the release that Truss has been preparing for the launch in Canada by finishing product formulations, branding and constructing a cannabis beverage production facility inBelleville, Ontario. Truss said it expects to launch its first beverages inCanadalater this year.
If this new joint venture is successful, expanding into the CBD space in the U.S. could help lift Molson Coors'volume declinesin the North American beer market. Last year, former Molson Coors CEOMark Hunter stepped down and the beer giant announced a name change"to better reflect its strategic intent to expand beyond beer and into other growth adjacencies."
The company has been diversifying bybuying craft beercompanies, including一个cider manufactureranda kombucha maker, andinvestingin L.A. Libations, a nonalcoholic beverage incubator
Even though the FDAhasn't approved CBDas an ingredient in foods and beverages, many companies are moving ahead with plans forCBD在加拿大和美国的产品
Astudy from A.T. Kearneyshowed 30% of Americans are willing to try a cannabis-infused nonalcoholic beverage.Keef sodashave seen success in the market already and Bolthouse Farmswas planning to launchCBD-infused products including some in juice and coffee. Arizona Beverages and Dixie Brands, a Denver-based cannabis company, alsopartneredlast yearfor the production, distribution and sale of marijuana-infused products containing THC.
As the market for cannabis products continues to grow and regulation in the U.S. remains uncertain, there are a lot of moving pieces. But with spending on allcannabinoidsprojected to reach $4.1 billion by 2022 from $1.5 billion last year,according to a reportfrom BDS Analytics, Molson Coors could be making the right move as it seeks to expand its reach beyond beer.
