Big Alcohol Making Big Moves in the Canadian Cannabis Market

For years, cannabis legalization activists heard stories about how Big Tobacco companies were poised to sell marijuana as they already had the infrastructure to cultivate the plant and package pre-rolls on a massive scale. After reformers had success in the 1970s decriminalizing personal use, some American tobacco execs did their due diligence to research the possibility of getting a piece of the “soon-to-be-legal” cannabis market. Since legalization didn’t come to the United States in any regulated system until California passed Prop 215 in 1998, tobacco companies diversified in the meantime, and while there have been some moves by tobacco companies to enter the cannabis market, Big Alcohol has made the bigger moves, particularly in Canada as the nation is set to become the first to legalize.

Canadian cannabis producer Aphria just announced the latest big deal with Big Alcohol, via a press release on Business Wire:

Under the terms of the agreement, Great North Distributors will be Aphria’s exclusive cannabis representative in Canada. The first-of-its kind deal gives Aphria 100% coverage of all cannabis retailers, whether provincially or privately operated, across Canada from the first day of legal adult-use sales.

“With this agreement, Aphria has established an unparalleled sales network, and will hit the ground running from the very first day of legal adult-use sales,” said Jakob Ripshtein, Chief Commercial Officer of Aphria. “Great North Distributors provides us with an experienced, dedicated team with a proven track record of driving sales and exceptional performance across all provinces. This deal will ensure that Aphria’s brands and products are proudly represented by cannabis retailers throughout the country.”

As a subsidiary of Southern Glazer’s, North America’s largest wine and spirits distributor, Great North Distributors has reach across every province across Canada, including established relationships and expertise in working with provincially owned and operated retailers and private retailers alike. Great North Distributors will establish a dedicated cannabis sales team that will be responsible for acting as the selling agent of Aphria’s broad portfolio of adult-use cannabis brands and products to provincial retailers throughout Canada, from the most populated cities to the most remote locations.

Marijuana Business Daily’s Omar Sacirbey has 4 big takes after Big Alcohol’s latest cannabis move:

1. Expect more deals

John Kaden, managing partner of Navy Capital, a New York firm investing in international cannabis companies, believes Southern Glazer’s may not be Aphria’s last alcohol partnership.

2. Look for future partnerships involving unique MJ expertise

In legal cannabis markets, liquor sales are dipping, and alcohol companies want to offset those losses. So says Paul Pedersen, a former cannabis consultant and now CEO of NextLeaf Solutions, an extraction firm in Vancouver, British Columbia.

3. Pay attention to what this means in the U.S. market

Southern Glazer’s move is perhaps another signal that major mainstream American companies are looking at the Canadian market as a venue to develop their cannabis expertise. Then they could be better prepared if and when the United States removes the federal prohibition governing cannabis.

4. Keep an eye on scale, efficiency

“It’s a more efficient way for Aphria to maximize its resources right now and get an experienced group at a fifth of the cost of putting together a sales team yourself.”

Sacirbey’s full Marijuana Business Daily is definitely worth reading.

It is certainly an exciting time for the Canadian cannabis industry, with many opportunities and obstacles, from regulatory hurdles to extreme market consolidation. Cannabis companies in the U.S. and around the world are watching and learning from Canadian counterparts as the regulations and market shakes out. While nothing in life is certain, it certainly helps cannabis industry participants to be as educated as possible and to network with the best entrepreneurs, investors, and experts that you can, as you find the best ways to market yourself and your business. Whether Big Alcohol or Big Tobacco or Big Pharma moves into the cannabis space, there will always be chances to find your niche or piece of the pie.

The International Cannabis Business Conference in Vancouver this June 24th-25th is the best place to learn the latest about the burgeoning cannabis industry in Canada and around the world and to network with top people across various sectors of the market. Get your tickets by June 6th to save $200. After Vancouver, the ICBC moves back into the States, traveling to Portland, Oregon, for an event on September 27th to 28th; get your tickets to Portland by September 12th to save $200.