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Historic American brewery The Boston Beer Company (BCC) has tapped an Australian cannabis manufacturer to launch a new range of non-alcoholic cannabis-infused beverages in Canada.
Under the deal, a subsidiary of Melbourne-based Althea Group (ASX: AGH) will research and develop various product formulations and recipes for the new line of BBC cannabis products - a new frontier for the US brewery founded in 1984.
BCC will provide Althea’s subsidiary Peak with funding of up to USD$2 million (AUD$2.73 million) for capital improvements associated with the project, plus USD$285,000 (AUD$389,000) for each year of the term of the agreement, totalling nearly $2 million.
Peak's deal has been signed with BBCCC (a subsidiary of BCC) and WeedMD Rx (a subsidiary of Entourage Health Corp).
“We are very excited that Peak and Entourage are partnering with US alcohol giant The Boston Beer Company to develop non-alcoholic cannabis-infused beverages for the Canadian market,” Althea Group CEO Josh Fegan said.
“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.
“AGH is very optimistic about the cannabis-infused beverage category and Peak remains well positioned to capitalise on the recreational cannabis boom in general.”
Peak has one of the first large-scale independent processing facilities of its kind in Canada, specialising in the development, manufacturing and distribution of recreational cannabis products, including cannabis-infused beverages, concentrates, topicals and more.
The subsidiary has already positioned itself as a leader in the cannabis-infused beverage category, supported by the fact that one of its customers had the highest-selling cannabis beverage in Ontario in July 2021 - weeks after it hit the shelves.
Research from Million Insights estimates the cannabis beverage market will grow at a compound annual growth rate of 17.8 per cent from 2019 to 2025 to reach US$2.8 billion.
The report found the growth is being driven by a range of factors including the rise of health and wellness movement and the preference for cannabis beverages among millennials.
The new deal comes just a week after Althea completed a $10.64 million capital raise to support strategy growth initiatives and continued global expansion.
“We are very pleased to have received strong interest for this capital raising,” Fegan said.
“The additional funding will fuel a range of strategic growth initiatives in our pharmaceutical business, and I’d like to take this opportunity to thank our new and existing shareholders for their support.
“We look forward to updating the market with news regarding our progress in established territories, as well as our ongoing international expansion.”
Shares in Althea are up 8.51 per cent to $0.26 per share at 11.05am AEST.
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