The ever progressive Canadians just know how to have fun which is just one reason cannabis-infused beverages are proving a major hit in the Great White North. Seeking to capitalising on this trend is medicines and recreational cannabis company Althea (ASX: AGH) which has partnered with beer giant The Boston Beer Company (NYSE: SAM) to combine their trademark products for a helluva lot of fun.
The deal has been inked via Althea’s subsidiary Peak Processing Solutions which is the Canada-based entity that has secured the required licensing to develop, manufacture, and distribute recreational cannabis products.
Also involved in the partnership is WeedMD Rx Inc., a subsidiary of Entourage Health Corp. (TSX-V: ENTG, OTCQX: WDDMF) which will exclusively supply the cannabis input materials to brew the beer.
Under the 5-year binding agreement, Peak will provide research and development services, laboratory support and testing of various non-alcoholic cannabis-infused beer recipes. Boston Beer Company will contribute USD $2 million towards this R&D work while a further $285k will be payable each year, bringing the value of the deal to USD $3.42m (approx AUD $4.67m).
Being involved in the venture will provide Althea with exposure to Boston Beer Company’s impressive roster of beer brands which are headlined by Samual Adams.
“This project is further validation of Peak’s significant and unique capabilities in the recreational cannabis industry and the latest in a growing list of deals Peak has signed with high quality customers, including seven North American publicly listed companies,” said Althea CEO, Josh Fegan.
“AGH is very optimistic about the cannabis-infused beverage category and Peak remains well positioned to capitalise on the recreational cannabis boom in general.”
Enabling Peak’s involvement in such a deal is the large-scale independent processing facilities they have built in Canada, the first of its kind at the time. Peak then obtained its Standard Processing Licence from Health Canada in September 2020 and has since started manufacturing and marketing medicinal cannabis products under the Althea brand.
With its deregulation in recent years, use of cannabis has continued to percolate beyond the medical field where its application in general foods is rising. Given this trend, it was only a matter of time until experts worked out a way to drink the drug which has seen rise in infused-cannabis beverages with their sales rising rapidly in Canada.
“Peak has built a world class facility in Canada, with the right staff and systems in place to ensure every drink is prepared with the highest care and excellence,” said BBCCC, Inc. Head of Cannabis, Paul Weaver
Driving their growth initiatives for new products and new markets, Althea last week raised AUD $10.64m via an Institutional Placement at $0.24 per share. Days later, the Company released their FY21 results which included a 128% increase in revenue to $11.5m with a net loss after tax of $15m.
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