New Brunswick

Moosehead Breweries high on cannabis-infused drink deal

New Brunswick-based Moosehead Breweries Ltd. is getting into the cannabis-infused beverage business, teaming up with Sproutly Canada Inc. to develop a line of non-alcoholic "rapid onset and offset" drinks.

Brewery announces joint venture with Sproutly Canada to develop line of non-alcoholic 'rapid onset' beverages

Andrew Oland, CEO of Moosehead Breweries, said the 152-year-old company is 'very selective' about new business opportunities and excited about entering the cannabis beverage market with Sproutly Canada. (CBC)

New Brunswick-based Moosehead Breweries Ltd. is getting into the cannabis-infused beverage business, teaming up with Sproutly Canada Inc. to develop a line of non-alcoholic "rapid onset and offset" drinks.

Moosehead, the oldest and largest independently owned brewery in Canada, announced the joint venture with the cannabis company on Tuesday.

They have entered a "definitive agreement" to develop, produce and market all-natural cannabis-infused beverages using Sproutly's naturally produced water-soluble cannabinoids known as Infuz2O.

With Sproutly's technology and Moosehead's experience developing products, the goal is a beverage that tastes good and provides an "immediate and controllable cannabis experience," Moosehead CEO Andrew Oland said in a release.

The "experience" would take effect in about five minutes and last up to 90 minutes — similar to traditional flower cannabis, the release said.

Matthew Oland, a senior Moosehead executive who will serve as CEO of the joint venture, described it as a "game changer for the sector."

The legalization of edibles is expected in Canada by Oct. 17. Ottawa has finished a consultation process for its proposed rules but has not yet released the final version.

Moosehead and Toronto-based Sproutly expect to form the new standalone beverage company by May 31.

No information about how soon the new products will be available has been released.

More details soon

They will be sold through provincially regulated and permitted online and retail storefronts, but Oland declined to say where.

More details will be announced "in the coming months," he said.

Oland also declined to say where the products will be produced.

Under Health Canada's proposed regulations, all cannabis-infused drinks will have to be produced in a separate factory from any other food or beverage.

"Moosehead Breweries' commitment to producing premium beer in Saint John is not changing," Oland said in an email.

A group of alcohol and cannabis companies formed an industry alliance earlier this month to push for changes to the proposed rules governing pot-infused beverages.

The Cannabis Beverage Producers Alliance, led by former Nova Scotia premier Darrell Dexter, is seeking, among other things, to be able to produce pot-based drinks in the same facilities where non-cannabis beverages are made.

Moosehead is not currently a member of the alliance "but is continuously evaluating all its options," said Oland.

50/50 partnership

The new company, identified only as the "Joint Venture," will be structured as a 50/50 equity ownership.

It will have its own management team and board, with each of the partners nominating three directors, according to the statement.

The joint venture will have exclusive rights to use Infuz2O for cannabis beverages for five years with the possibility of a two-year extension if it reaches "certain revenue targets."

The company will also have the ability to enter the European market once recreational cannabis is legalized, according to release.

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