Molson Coors Canada, HEXO To Form JV For Cannabis-infused Beverages

(RTTNews) - Molson Coors Canada, the Canadian business unit of Molson Coors Brewing Co. (TAP, TAP-A, TPX.TO), announced Wednesday that it has entered into a definitive agreement with Canadian cannabis producer Hydropothecary Corp. or HEXO (HEXO.TO).

The deal is 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 the Canadian 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.

Closing of the transaction, which is targeted to occur before September 30, 2018, is subject to the satisfaction of certain conditions.

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.