Brewing giant Molson Coors and Canadian partner Hexo look set to take their non-alcoholic, cannabis-infused drinks range south of the border.
To be known as Truss in Canada it will go on sale this autumn and comes as Molson Coors takes steps to shore-up revenues in an era of declining alcohol sales. BNN Bloomberg reports that the joint venture (JV) partners are looking to unveil a similar cannabis-infused drink range for the U.S. market in 2020.
Fortune 500 Interest in Cannabis
In a conference call Hexo chief executive Sebastien St.-Louis said it plans to launch a suite of products, and is in varying levels of discussions with ‘roughly 60 Fortune 500 companies for potential partnerships’.
He said: “We think we can enter with our Fortune 500 partners… We think we can lever their existing distribution and go through non-marijuana channels.
In August last year Molson Coors Canada, the Canadian business unit of Molson Coors Brewing Company and Hexo (The Hydropothecary Corporation) announced a JV, to pursue opportunities to ‘develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization’.
Hexo Losses Deepen
The unveiling of the JV’s U.S. plans came as Hexo reported financial results for the three months ending on April 30, this year. While revenues rose to $13 million, up from $1.24 million during the same period a year earlier, they fell short of the $14 million expected by analysts, according to Thomson Reuters Eikon.
Hexo’s quarterly net loss deepened to $7.75 million, from a $1.97 million loss a year earlier, as operating expenses jumped to $24.1 million from $5.3 million during the same period in 2018. RBC Capital Markets analyst Douglas Miehm said Hexo’s results were ‘a little light’.
Declining Beer Demand Prompts Reconsideration
However Hexo remains bullish saying it still expects to ramp its net revenue to $400 million by 2020 – providing the roll-out of the the next generation of Canadian cannabis products proceeds smoothly this autumn.
As concerns of shortages in the Canadian market grow Hexo revealed it has secured a supply of 60,000 kilograms of hemp for extraction of CBD, in preparation for the upcoming edibles market and its U.S. launch in 2020. It has also entered into a supply agreement for 200,000 kilograms of hemp to be supplied during its 2020 financial year, reported BNN Bloomberg.
The Canadian Press reports that Molson Coors plans to continue focusing on offering more premium and innovative drinks like Truss as it grapples with declining beer demand in North America.