The Hydropothecary Corp Wins Molson Coors Partnership for Cannabis Beer

James West
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The Hydropothecary Corporation (TSX:HEXO) and Molson Coors (NYSE:TAP) tied the knot in the cannabis world today with the announcement of a new partnership aimed at bringing a cannabis-infused beer to the Canadian market post-legalization in October 2018. The move comes as a surprise as many speculators believed that Aphria was going to be the one to do a deal with the brewing giant.

Questions remain, however, as to whether or not this constitutes a positive development for Hydropothecary. As a minority shareholder in the project, it will be subject to the timetable and whims of its much larger partner, who will ultimately prioritize sensitivity to its brand and legal risks ahead of a wholesale embrace of the cannabis industry.

It is as yet unclear as to what the financial obligation will be to Hydropothecary as well.

The deal will see the formation of a new company in which Molson Coors will retain a 57.5 percent controlling interest with Hydropothercary holding the remaining shares. The deal is expected to close sometime before September 30th, and is subject to certain terms and conditions, including TSX approval.

Hydropothecary CEO Sebastien St. Louis gave no indication during any previous media encounters that he was considering such a move.

“Canada is breaking new ground in the cannabis sector and, as one of the country’s leading beverage companies, Molson Coors Canada has a unique opportunity to participate in this exciting and rapidly expanding consumer segment. This new venture is consistent with our growth strategy and our commitment to being First Choice for Consumers and Customers by ensuring that Canadians have access to high-quality products that meet their evolving drinking preferences,” said Frederic Landtmeters, President and CEO of Molson Coors Canada.

 

James West

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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