Boston Beer to launch cannabis beverages in Canada as AB InBev and Constellation Brands feud in US courts

US – Boston Beer is doubling down on its strategy to expand into the highly lucrative cannabis market with the planned launch of a nonalcoholic cannabis-infused beverages in Canada. 

Bost Beer’s subsidiary BBCCC Inc. is partnering with Ontario-based manufacturer Peak Processing Solutions and grower Entourage Health to debut the nonalcoholic dink. 

According to a statement from Boston Beer, production of the beverage containing cannabis biomass from Entourage Health will start in the fourth quarter.  

Under the terms of the five-year agreement, Entourage will be the exclusive distributor of the beverages in Canada. 

Boston Beer’s announcement demonstrates the company’s focus on the emerging category, which is estimated to hit US$2.8 billion by 2025, according to a report from Million Insights cited in Entourage’s press release.   

Launching in Canada -where commercial cannabis is legal nationwide- provides Boston Beer a good footing in the market even as it continues to  gauge the regulatory environment in the U.S. for future expansion opportunities. 

The licensing agreement with Entourage gives Boston Beer’s products a known national sales force to market, distribute and sell the products in Canada. 

 Boston Beer, which has a growing appetite to grow beyond the beer aisle, can also use its brand-building expertise to establish the new beverages. 

AB InBev sues Constellation Brands 

Meanwhile, AB InBev has filed a lawsuit in the U.S. District Court of the Southern District of New York Tuesday over Constellation’s launch of two Modelo Reserva beers, according to a copy of the court filing. 

The beers include one aged on tequila barrels which AB InBev said breaches U.S. and Mexican laws that “strictly restrict” the use of the word tequila. 

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The second beeer is on bourbon barrels which the maker of Budweiser beer says breaches Constellation’s sublicense agreement to sell “Mexican-style beer” because bourbon has nothing to do with Mexico. 

The suit marks the second time the two companies are finding themselves over business disagreements.

In February, AB InBev’s Mexican arm Grupo Modelo filed a lawsuit against Constellation Brands accusing the company of violating a brand licensing agreement when it launched Corona Hard Seltzer. 

 The lawsuit said the agreement only allowed Constellation to use Corona in the U.S. when it came to beer, but Constellation had decided to extend it even further. 

Constellation has however said that AB inBev’s claims are without merit as it has fully complied with the terms set forth in its sublicense agreement. 

“We will continue to vigorously defend our rights under the agreement and applicable law,” Constellation said in a statement. 

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