Molson Coors Beverage Company is deepening its relationship with Quebec-based cannabis company HEXO, today announcing the launch of a new joint venture to produce non-alcoholic CBD-infused beverages in Colorado.
The new venture, Truss CBD USA, will be majority owned by Molson Coors and operate as an independent company with its own board of directors, management and resources. All products will be produced in Colorado and distributed exclusively for sale within the state.
The deal expands the two companies partnership, having previously launched Truss Beverages Co. in August 2018 to develop CBD drinks for the Canadian market. Molson Coors, the second-largest beer company in the U.S., holds a controlling 57.5% interest in that venture, with HEXO owning the remaining 42.5%.
“CBD beverages are a growing segment within the non-alcohol beverage category and this JV provides us an opportunity to build capabilities in Colorado,” Molson Coors president of emerging growth Pete Marino said in a press release. “We chose Colorado because of its established regulatory framework for CBD and we plan to approach any opportunities in full alignment with our commitment to commercial responsibility, transparency and compliance.”
In the release, Sebastien St-Louis, CEO and co-founder of HEXO, praised the two companies for having “already built a great partnership in Canada” and noting that the new venture will “bring those learnings to Colorado.”
In an email, Marino did not provide details on each company’s individual stake, but commented that this deal was “similar in structure” in terms of ownership percentage to Truss Beverage Co. David Coors, who oversees Molson’s cannabis ventures in his role as Vice President of Next Generation Beverages, will serve on Truss CBD USA’s board of directors, and Jane Armstrong will serve as General Manager.
Specifics on how and when production will begin in Colorado were not available, though Marino confirmed that no CBD products will be manufactured at Molson Coors facilities. In Belleville, Ontario, HEXO is constructing a 2.5 million sq. ft. cannabis beverage production facility to serve the Canadian market.
According to Marino, Truss CBD USA will leverage its Canadian counterpart’s portfolio of hemp-infused brands in Colorado.
Molson Coors isn’t the only major beer company exploring the potential for cannabis beverages in Canada, which approved legal sales in December 2019. Anheuser-Busch InBev and Toronto-based cannabis brand Tilray launched a joint venture to research both THC- and CBD-infused beverages in December 2018, with each side committing $50 million to the project. Constellation Brands, the world’s largest spirits company, also has a minority ownership in Canopy Growth Corp.
However, Flow Glow, a CBD-infused spring water revealed in October as the first of six planned brands within Truss’s cannabis beverage portfolio, has yet to launch. In an email, Marino said the venture has been “preparing for launch, including completion of production formulations, branding and construction” of the Belleville facility. Truss “is expected to launch its first beverages in Canada later this year,” he wrote.
According to cannabis market research firm Brightfield Group, the U.S. CBD beverage market was worth $143.1 million in 2019. Colorado ranks 10th in the country in terms of CBD beverage consumers by state, with that group representing 2.9% of U.S. users.