Molson Coors To Exit U.S. CBD BusinessDecember 6, 2022
Molson Coors will unwind the U.S. portion of its joint venture with Hexo at the end of this year, the beer giant announced. By shutting down Truss USA, Molson Coors will exit the CBD beverage business in the U.S., effective December 31. The decision does not affect Truss’s main operations in Canada, where it remains a key player in the emerging cannabis drinks market.
The decision hinged on the continued inaction of federal lawmakers to reform cannabis laws in the U.S. In the company’s estimation, there remains no near-term pathway to federal legalization, which in turn has created an atmosphere of uncertainty and fear in which retailers and distributors hesitate to take on CBD brands, complicating distribution and the path to profitability.
“Not every project or innovation will meet our ambitions,” said Pete Marino, president of emerging growth at Molson Coors. “What’s important is that we learn from each and build capabilities that will serve us well into the future. The key for us is to go big behind what’s working and smartly pivot out of what isn’t working from a scale standpoint, like CBD beverages.”
Molson Coors and Hexo launched Truss in 2018 to develop cannabis drinks for the Canadian market. In 2020 it debuted its full lineup of brands which includes Veryvell, House of Terpenes, Little Victory, Mollo, Bedfellows Liquid Arts, and MXG. The company has continued to expand its portfolio, capitalizing on trends like the seltzer craze when Little Victory, for instance, extended with three sparkling fruit-flavored seltzers in June.
Truss USA was formed in 2020 to pursue CBD opportunities stateside. It was based in Colorado for its clearly developed CBD regulations. After launching its Veryvell CBD line of sparkling waters–consisting of three flavors and containing 20mg of CBD a 12-ounce can–in Colorado in early 2021, it expanded distribution to a further 17 states in October of last year.
Should the regulatory landscape in the U.S. change, the company said it would be prepared to re-enter the space. Currently, however, the ability to scale in the category remains difficult, Marino says.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.
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