Why Did Molson Coors Choose to Partner with Hexo Corp? They wanted to get into the CBD and cannabis market. Thus the creation of Truss Beverages Co.
In September 2019, Molson Coors made a startling announcement; they had gone all-in on CBD. Coors had finalized a deal with two CBD companies, Colorado’s Best Drink, and DRAM Apothecary, to distribute their products. Coors will use its vast distribution network to increase the availability of their products. We talked at great length about these deals and what they mean for the CBD industry, and you can read our report here.
In that report, we also talked about another partnership that Molson Coors had made that was pretty unique. What made this partnership unique was that it wasn’t a distribution partnership. Molson Coors had decided to dive into the CBD world headfirst.
Molson Coors partnered with Hexo Corp to create Truss Beverage Co; a company focused on CBD and cannabis drinks. When the two companies announced the formation of Truss Co, it caused a lot of excitement in the CBD world.
For some, this decision was a significant win for the CBD industry. It proved that CBD wasn’t a flash in the pan if a company as big as Molson Coors was investing in it. CBD enthusiasts have analyzed a lot of aspects of the deal, but there’s one part that they haven’t examined. Why did Molson Coors choose to partner with Hexo Corp? After looking into all the details, we have figured out the reason why. Let’s take a look.
Why Did Molson Coors Choose to Partner With Hexo Corp
Since CBD broke into the mainstream, Molson Coors had been looking for a way to put their foot in the door. And their interest wasn’t only limited to CBD. They also wanted to explore the recreational cannabis market. Their ambition was directly responsible for the creation of Truss Beverages Co.
Frederic Landtmeters, President of Molson Coors Canada, perfectly captured the excitement of the moment when they announced its formation.
“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. 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.”
His statement gave us a lot of insight into the expectations of Molson Coors in regards to this new venture. Truss Co will be a way for Molson Coors to put their foot into the CBD industry. The company will mainly focus on the production of CBD-infused beverages.
Truss Beverages Co recently unveiled their first line of drinks, Flow Glow. This is a product that they made in collaboration with Flow Glow Beverages Inc. According to the press release, consumers can get Flow Glow in 2 flavors, Raspberry + Lemon and Goji+ Grapefruit.
Ownership of Truss Beverages Co.
One of the most exciting things about Truss Beverages Co. is the ownership structure. Molson Coors owns 57% of Truss Co, while Hexo Corp owns the remaining 43%. While Molson Coors does have a more significant stake and more control over Truss Co., both companies bring something different to the table.
In this deal, Molson Coors brings to the table a unique understanding of the beverage industry. They have been making alcoholic drinks since the late 19th century and have acquired a lot of experience along the way. Molson Coors also has a lot of experience when it comes to distribution.
Molson Coors also brings a lot of money to the table. The company is one of the most valuable beverage companies in the world, and they have a lot of money to invest. This money will go a long way to help Truss Beverages Co. in establishing its presence in the industry.
For Hexo Corp, it’s a whole other story. They do not have a long history or the years of experience that Molson Coors has. On paper, it seems like Hexo Corp isn’t contributing as much to the deal, but this couldn’t be further from the truth. So what does Hexo Corp bring to the table?
What Does Hexo Corp Bring to the Table?
To understand why Molson Coors chose to partner with Hexo Corp, we need to understand what Hexo Corp brings to the table.
1. A low market capitalization
The first thing that Hexo Corp brings to the table is low market capitalization. At the time the deal was made, Hexo Corp had a lower market capitalization than other major players in the Canadian cannabis industry.
If you are not a big fan of Wall Street, you are probably asking yourself what market capitalization is. According to Investopedia, market capitalization refers to the total dollar market value of a company’s outstanding shares of stock. This means that a company with a higher share value will have a higher market capitalization than a company with a lower share value.
Therefore it was cheaper for Molson Coors to obtain a part of Hexo Corp than for them to get part of another company.
2. An understanding of the CBD industry
Hexo Corp also brings to the table a unique knowledge of the CBD industry. The CBD industry is relatively young, but Hexo Corp has been at the forefront of the industry.
Hexo Corp also has a dedicated team of professionals that have spent years researching CBD. The company is also one of the most recognizable names in the CBD industry, and it has a significant following.
3. An understanding of oils, infusions, and powders
Hexo Corp also has a unique understanding of how to work with oils, powders, and infusions. This expertise will come in handy as Truss Beverages Co. develops a line of CBD-infused beverages.
The deal between Molson Coors and Hexo Corp has shaken up the CBD world. Now all eyes are on Truss Co, the child of this deal, to see how well it performs in the CBD world. We will keep an eye on all three companies, and we will let you know if any significant change happens.
Thank you for reading with us today! Be sure to check out similar articles to keep your CBD knowledge nice and high like “CBD Beer Will Be Your New Favorite Drink” or “3 Best CBD Infused Wines You Have to Try“.
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