CannTrust, alcohol wholesaler partner for cannabis distribution in Canada

CannTrust – one of Canada’s leading purveyors of cannabis – inked a strategic partnership with Breakthru Beverage Group to establish a cannabis-focused sales brokerage company.

The exclusive partnership will develop a route-to-market platform for CannTrust’s recreational cannabis products in Canada.

The sales brokerage company will be a new subsidiary of Breakthru Beverage Group (BBG) and entirely separate from its beverage alcohol brokerage, Breakthru Beverage Canada. BBG is one of the country’s largest alcohol brokers of premium spirits, wine and beer brands.

Adult-use cannabis sales start across Canada on Oct. 17.

Breakthru – whose clients include Red Bull, Constellation Brands and Diageo – will also invest nearly 10 million Canadian dollars ($7.5 million) in CannTrust, with an option to nearly triple that if CannTrust exceeds certain sales thresholds.

CannTrust President Brad Rogers told Marijuana Business Daily it is a direct investment and the fresh capital will not go to the cannabis-focused sales brokerage company. He said there has been no specific allocation for the investment.

Breakthru, a privately owned company, said its North American revenue in 2016 was $6 billion.

This is the second large alcohol distribution company to enter the cannabis industry this year.

Great North Distributors, a wholly owned Canadian subsidiary of U.S.-based Southern Glazer’s Wine & Spirits, signed an agreement to become the exclusive distributor for Leamington, Ontario, cannabis company Aphria.

Canada has committed to begin regulating edibles and infused products within one year of enactment of the federal Cannabis Act.

CannTrust’s shares trade on the Toronto Stock Exchange as TRST.

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