As part of the agreement, Hydropothecary is going to issue share-purchase warrants to Molson, and both companies hope to close the deal before the end of September.
"The cannabis revolution is in full swing while the alcohol industry appears to be largely sitting on the fence, drink in hand, occasionally throwing crumpled cans in the general direction of the ongoing legalization debate", alcoholic drinks industry analyst Spiros Malandrakis told The Drinks Business. Molson would own 57.5 per cent of the JV, while Hydropothecary would own the other 42.5 per cent.
He said there are no plans to sell beverages to US states that have legalized cannabis.
In a statement, Molson Coors President and CEO Frederic Landtmeters said the companies will aim to be a "market leader in offering Canadian consumers new experiences with quality, reliable and consistent non-alcoholic, cannabis-infused beverages".
Market research firm Euromonitor International estimated that the global market for legal and illegal cannabis is about $150 billion, with legal marijuana sales in Canada projected to total $7.5 million and $10.2 billion in the USA this year.
St-Louis went on to say that the companies share "a track record of excellent practices, as well as respect for law and regulations", and a relationship built on trust that will develop high-quality, responsible cannabis-infused beverages for Canadians. "Indeed, our own consumer survey work in Canada, as well as consumer survey work conducted by Deloitte, indicate that only 20% of users regularly consume alcohol when using cannabis".
Several other companies have ventured into the non-alcoholic infused cannabis beverage business, including California's Manzanita and Madrone, Washington's Le Herbe and Colorado's Dixie Elixirs.
Adults in states with legal cannabis binge drink an average of 13% fewer times per month than those in states without legal recreational marijuana, according to Vivien Azer, a cannabis industry analyst at the investment bank Cowen.
Meanwhile, Molson Coors reported that it earned US$424.1 million or $1.96 per diluted share in the second quarter. Manning & Napier Group LLC acquired a new position in Molson Coors Brewing Co Class B in the 2nd quarter valued at approximately $2,520,000.
Revenues for the period ended June 30 slipped to almost US$3.1 billion, slightly below expectations.