The upcoming legalization of marijuana in Canada has been a controversial topic, however, it’s an undeniably good opportunity for investment. Hill Street Beverage Co., a producer of cannabis-infused beverages, is taking advantage of this by starting new partnerships that will help them to enter the up-and-coming Canadian cannabis-based edibles industry.
Hill Street Beverage Co. has partnered with three companies; Vin First Innovative Packaging, a wine and mixed beverage manufacturer and co-packer, Cannabis Compliance Inc., a licensing and compliance advisor and Lexaria Bioscience Corp., a licensor of patented technology that infuses wine and beer.
Thanks to these partnerships, Hill Street will be able to enter the edibles market with Ontario wineries and breweries that are eager to test new technologies and beverage formulations. This new agreement between the Toronto-based company and Vin First Innovative Packaging allows them to offer alcohol-free, cannabis-infused wines and beers. In addition, this makes Hill Street one of the first Canadian companies to introduce cannabis-infused beverages to the market.
“Together with our new partners, we’re excited to bring such game-changing capabilities to Ontario.” Hill Street CEO, Terry Donnelly stated in a press release.
The question remains whether this is a market worth tapping into or not. CBC reported that Canadians had spent $5.7 billion on marijuana last year. On top of that, Stats Canada reported that nearly 5 million Canadians bought marijuana last year and spent around $1,200 each.
In fact, marijuana sales might be competition to the tobacco and alcohol industry. In terms of production, the marijuana industry is already bigger than Canada’s beer or tobacco industries. In 2014 around $3.4 billion worth of cannabis was produced compared to $2.9 billion in the brewing industry and one billion in tobacco products.
The popularity of marijuana in Canada was studied by Deloitte. The motivations behind cannabis consumption resulted in interesting statistics; 51 percent of consumers said they use marijuana to relax and sleep, 49 percent use it to reduce anxiety, 23 percent claim to use it to help concentrate, 35 percent do it to have fun with their peers and 16 percent say that they use it to help connect with others.
Hill Street Beverage isn’t the first beverage company to notice this growing market, Constellation Brands had invested $191 million to acquire a 9.9 percent minority stake of Canopy Growth, a Canadian cannabis company. Molson Coors Brewing Co., Diageo Pls, Pernod Ricard SA and Anheuser are all looking into the cannabis market as well. In addition, Keith Villa, an ex- Molson brewer, recently launched a new company called Ceria Beverages that specializes in THC-infused non-alcoholic beverages.
Legalization might make room for a whole new product market in Canada and manufacturers would benefit from getting an early start in cannabis investments.