AB InBev set to sink R1.42bn in cannabis drinks

Gluten-Free Edibles

AB InBev and Tilray said they each plan to invest up to $50 million to research drinks with cannabidiol, or CBD, a component of cannabis that does not cause intoxication, and tetrahydrocannabinol, or THC, the substance that makes people high.

Canada legalised recreational marijuana in October, leading to a surge in interest from beer and tobacco companies looking to invest in the market.

Coca-Cola, Pepsi and Guinness brewer Diageo have said they are closely watching the market for cannabis as it evolves.

Proposed Health Canada rules would allow Canadians to buy a wide range of edible cannabis products, but limit the amount of THC in each package and ban anything that might appeal to children. "We intend to develop a deeper understanding of non-alcohol beverages containing THC and CBD that will guide future decisions about potential commercial opportunities", said Kyle Norrington, President, Labatt Breweries of Canada.

"When I look across these categories it strikes me that, if you're currently in the illegal production business, we now have matchy-match on every category you make money on, which means you're going to quit making money soon".

Earlier this year, Molson Coors formed a joint venture with Quebec cannabis company Hexo, a recreational cannabis "sister brand" to The Hydropothecary, a licensed producer and distributor of medical cannabis.

Belgium-based AB InBev, the owner of more than 500 beer brands including Budweiser and Stella Artois, said it will participate in the project through its subsidiary Labatt Breweries of Canada.

Health Canada
Big Pharma Picks up on Medical Marijuana

The value of venture capital deals in the US marijuana industry more than doubled this year compared to 2017, according to data from Pitchbook, and private equity investments in cannabis increased by more than one-third.

AB InBev said yesterday that the partnership was limited to Canada and decisions regarding the commercialisation of the beverages would be made in the future.

Both companies believe that the legal market for THC and CBD beverages will only thrive if the industry embraces appropriate regulation of adult-use cannabis. Shares of AB InBev were little changed.

British Columbia-based Tilray Inc. has products available in 12 countries.

There are no legal cannabis beverages now on the market, as the sale of cannabis edibles - including drinks - remains illegal in Canada.

With strong track records of responsible product development and marketing in their respective industries, AB InBev and Tilray believe that the legal market for THC and CBD beverages will only thrive if the industry embraces appropriate regulation of adult-use cannabis, including responsible production, marketing, sale and consumption.

"Labatt is committed to staying ahead of emerging consumer trends".

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