TORONTO, Aug. 1, 2018 /CNW/ - Molson Coors Canada, the Canadian business unit
of Molson Coors Brewing Company (NYSE: TAP; TSX: TPX), and leading
Canadian cannabis producer, The Hydropothecary Corporation ("HEXO")
(TSX: HEXO), are pleased to announce that they have entered into a
definitive agreement to form a joint venture to pursue
opportunities to develop non-alcoholic, cannabis-infused beverages
for the Canadian market following legalization.
The joint venture will be structured as a standalone start-up
company with its own board of directors and an independent
management team. Molson Coors Canada will have a 57.5%
controlling interest in the JV, with HEXO having the remaining
ownership interest. The new company will combine the proven
beverage experience of Canada's leading brewer with a recognized
innovator in the fast-growing cannabis sector to explore the highly
anticipated consumable cannabis market, which is expected to be
legally permissible in Canada in
2019.
"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. "While we remain a beer
business at our core, we are excited to create a separate new
venture with a trusted partner that will be a market leader in
offering Canadian consumers new experiences with quality, reliable
and consistent non-alcoholic, cannabis-infused beverages. We look
forward to partnering with HEXO, a recognized leader in the medical
cannabis space in Canada that will
bring robust production capacity, a track record of innovation,
and, most importantly, shared values when it comes to doing
business the right way and earning the trust of
consumers."
"HEXO continues to lead the way for smoke-free cannabis
innovation in Canada. We are
excited about this partnership with Molson
Coors Canada, an iconic leader in adult beverages, as we
embark on the journey of building a brand new market. With this new
company, we are bringing together Quebec's oldest, most established company with
one of its newest success stories in a truly innovative
partnership," said HEXO's CEO and co-founder Sebastien St-Louis. "As two leading companies
who share a track record of excellent practices, as well as respect
for law and regulations, HEXO and Molson
Coors Canada have established a relationship built on trust,
and together we will develop responsible, high-quality
cannabis-infused beverages for the consumable cannabis market in
Canada."
Closing of the transaction, which is targeted to occur before
September 30, 2018, is subject to the
satisfaction of certain conditions, including execution and
delivery of various transaction agreements, including governance
documents and R&D and supply agreements. In connection
with the closing of the transaction, subject to the final approval
of the Toronto Stock Exchange, HEXO will issue to Molson Coors Canada warrants to purchase shares
of HEXO.
About Molson Coors
Canada
Molson Coors
Canada is the Canadian business unit of Molson Coors Brewing
Company. Headquartered in Toronto,
Ontario, MCC is North
America's oldest brewer and Canada's second largest brewer
by volume, selling approximately one-third of the total Canadian
beer market in 2017. Its portfolio consists of leading brands
in all major product and price segments, including global priority
brands Belgian Moon, Coors Banquet, and Coors
Light, regional champion Molson Canadian, and other key
owned brands, including Creemore Springs, Granville Island, Molson Dry, Molson Export, Old
Style Pilsner, and Rickard's, and strategic distribution
partnerships, including those with Heineken. MCC also includes
partnership arrangements related to the distribution of beer in
Ontario, Brewers' Retail Inc., and
in the Western provinces, Brewers' Distributor Ltd.
About HEXO
HEXO creates and distributes innovative,
easy-to-use and easy-to-understand products to serve the Canadian
cannabis market. One of the country's lowest-cost producers, HEXO
is rapidly increasing its production capacity in the lead up to the
adult-use cannabis market. The Company currently operates with over
300,000 sq. ft. of production capacity with construction on another
1,000,000 sq. ft. expansion set to be complete by year end. HEXO
will serve the adult-use market under the HEXO brand, while
continuing to serve its medical cannabis clients through the
well-known Hydropothecary brand.
Forward-Looking Statements
This press
release includes "forward-looking statements" within the meaning of
applicable securities laws. Generally, the words "believe,"
"expect," "intend," "anticipate," "project," "will," "outlook," and
similar expressions identify forward-looking statements, which
generally are not historic in nature. Although the companies
believe that the assumptions upon which their respective
forward-looking statements are based are reasonable, they can give
no assurance that these assumptions will prove to be correct.
Important factors that could cause actual results to differ
materially from the companies' projections and expectations are
disclosed in Molson Coors Brewing Company's filings with the
Securities and Exchange Commission, including its most recent
Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q,
and in HEXO Corporation's Annual Information Form and continuous
disclosure filings with the Canadian Securities Administrators,
which are available on SEDAR's website at
www.sedar.com. These factors include, among others,
failure to complete or realize anticipated benefits and synergies
from the joint venture; potential negative consumer, investor or
public perception of our respective current brands or companies;
changes in consumer preferences and product trends; and political,
legal and regulatory uncertainty relating to cannabis products
generally. All forward-looking statements in this press release are
expressly qualified by such cautionary statements and by reference
to the underlying assumptions. Neither Molson Coors Brewing Company
nor HEXO Corporation undertakes to update forward-looking
statements relating to their respective businesses, whether as a
result of new information, future events or
otherwise.
SOURCE Molson Coors Canada