Molson Coors Canada Inc., a unit of Denver-based brewer Molson Coors Brewing Co., said Aug. 1 that it agreed to form a joint venture with Canadian medicinal cannabis producer The Hydropothecary Corp., or Hexo, to develop nonalcoholic, cannabis-infused drinks.
The move comes after the Canadian government legalized marijuana in the country, effective Oct. 17. The drinks created by the JV would be targeted at the Canadian market.
Under the terms of the agreement, the JV will be operated as a standalone startup company with its own board and independent management team, with Molson Coors Canada holding a 57.5% controlling interest and Hexo owning the remainder. Financial details were not disclosed.
The deal is expected to close before Sept. 30, subject to certain conditions including execution of agreements for the JV related to supply as well as research and development. In addition, Hexo will issue warrants for Molson Coors Canada to purchase shares in the medicinal cannabis company in connection with the closing, subject to approval by the Toronto Stock Exchange.