Molson Coors and HEXO joint venture targets zero-alcohol CBD beverages

16 Apr 2020 --- Canadian Brewing company Molson Coors Beverage Company and Canada-based cannabis player HEXO Corp have formed a joint venture (JV) to explore opportunities for non-alcohol hemp-derived cannabidiol (CBD) beverages. The collaborative venture, which is dubbed “Truss CBD USA,” and based in Colorado, US, will be majority-owned by Molson Coors and will operate as a standalone entity with its own board of directors, management team, resources and go-to-market strategy.

“CBD beverages are a growing segment within the non-alcohol beverage category and this JV provides us an opportunity to build capabilities in Colorado,” notes Pete Marino, Molson Coors’ President of Emerging Growth. “We chose Colorado because of its established regulatory framework for CBD and we plan to approach any opportunities in full alignment with our commitment to commercial responsibility, transparency and compliance.”

Exploring hemp-derived CBD beverages is part of Molson Coors’ strategy to grow beyond the beer aisle with wine and spirits and non-alcohol drinks. Molson Coors and HEXO have another JV to produce non-alcohol cannabis-infused beverages for the Canadian market called Truss Beverages. Truss has been preparing for launch, including completion of product formulations, branding and construction of a cannabis beverage production facility in Belleville, Ontario, Canada. Truss is expected to launch its first beverages in Canada later this year.

Exploring hemp-derived CBD beverages is part of Molson Coors’ strategy to grow beyond the beer aisle with wine and spirits and non-alcohol drinks. “Molson Coors and HEXO have already built a partnership in Canada that we believe will produce some of the best adult non-alcohol beverage brands in the Canadian market,” highlights Sebastien St-Louis, CEO and Co-Founder of HEXO.

All production and distribution for Truss CBD USA will be kept within Colorado state lines since it is one of a few states that has an established regulatory framework for hemp-derived CBD in F&B. No hemp-derived CBD products will be produced at Molson Coors facilities.

CBD space heating up
The partnership adds to the long list of CBD-related industry moves and NPD, seemingly unaffected by the constant regulatory obscurity surrounding the space. Recently, Kemin Industries launched online CBD Calm-branded medical cannabis products for the Brazilian market. The move was in collaboration with CBD Vida, a Brazilian provider of medical cannabis products. 

In March, the US Food and Drug Administration (FDA) released an update on its CBD regulation efforts which are focused on key areas such as consumer education, gathering scientific evidence and addressing products that violate current regulation. Amid a complicated regulatory environment on CBD, the update was instigated by request of the US Congress, after FDA’s US$5 million dollar budget plea. FDA says it is also taking steps to provide a transparent way for stakeholders to communicate new information on CBD as it becomes available. Despite FDA’s efforts however the new report offers little clarity and no imminent change in CBD’s legal status and the move elicited responses from industry-oriented organizations.

Following the update, the FDA announced that it will officially reopen the public comment window on cannabis and CBD products, “extending it indefinitely.” Although the extended comment period is to collect more scientific data on cannabis products across the supply chain, US-based Natural Products Association (NPA) pegged the move as a “huge and surprising step backward.” Moreover, it accuses the FDA of “risking a public health crisis by delaying necessary regulatory action on CBD.” 

Meanwhile, in Europe, hemp and hemp-derived products are labeled as EU-wide novel foods. This will continue to be as such, according to the German Federal Ministry for Food and Agriculture (BMEL)’s response to the European Industrial Hemp Association (EIHA)’s communication that it received the former’s support in the ongoing CBD status debate. The current novel food status will not change until sufficient evidence of a “significant history of [cannabis and cannabis extracts] consumption in the EU before May 15, 1997” is provided, the ministry said.

Edited by Kristiana Lalou