Molson Coors Brewing Co. said its Canadian unit is entering into a deal that will develop cannabis-infused beverages in Canada.
The Denver brewer said its Canadian unit, Molson Coors Canada, is teaming with Canadian cannabis producer, The Hydropothecary Corporation (HEXO), to create a joint partnership "to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization." Marijuana use in Canada will become legal later this year.
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"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," said Frederic Landtmeters, president and CEO of Molson Coors Canada, in a statement.
Molson Coors Canada will have a 57.5 percent controlling interest in the joint standalone venture and HEXO will control the remainder.
Separately, Denver-based Molson Coors reported second-quarter net sales fell slightly but second-quarter earnings per share bested analysts' expectations.
Molson Coors reported second-quarter net sales fell to $3.085 billion from $3.091 billion a year earlier. Analysts were expecting sales of $3.1 billion.
Adjusted second-quarter net income rose to $406.1 million, or earnings of $1.88 per share, from $367.1 million, or $1.70 per share in 2017. Analysts were expecting earnings of $1.85 per share.
Sales in the United States fell by more than 3 percent in the latest quarter, but sales in Europe rose by more than 11 percent.
"Our full year underlying cost savings and free cash flow guidance has not changed, despite ongoing industry demand challenges in the U.S. and Canada and inflationary pressures. While we are aggressively addressing our volume performance in North America, performance in our Europe and International businesses was strong in the quarter," said Mark Hunter, CEO and president, in a statement.
In early Wednesday trading, shares in Molson Coors were basically unchanged.
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