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Drinks distribution giant moves into cannabis

Southern Glazer’s Wine & Spirits will become the first drinks distribution company to move into the cannabis industry in Canada.

Recreational cannabis use is set to be legalised in Canada this summer

Southern Glazer’s, the largest wine and spirits distribution group in North America, has created a subsidiary exclusively for the representation of cannabis products in Canada.

The unit, called Great North Distributors, has entered into a partnership with cannabis producer Aphria to distribute its products throughout Canada once recreational cannabis use is legalised in the country later this year.

The “first-of-its-kind deal” will see Great North Distributors create a dedicated cannabis sales team that will act as the selling agent for Aphria’s portfolio.

Under the terms of the agreement, Aphria will receive access to all cannabis retailers in Canada from the first day the drug is legalised.

Doug Wieland, executive vice president and general manager, Southern Glazer’s Wine & Spirits Canada, said: “Our decision to become the first beverage alcohol distributor to facilitate the legal distribution of cannabis in Canada reinforces our innovative, first-mover position in the industry.

“We are thrilled to partner with cannabis industry leader Aphria, and to leverage our experience and expertise to ensure the efficient, legal and safe distribution of cannabis in Canada.”

Southern Glazer’s has stated its intention to apply its “industry-leading data analytics capabilities to the new cannabis industry”.

Jakob Ripshtein, chief commercial officer of Aphria, added: “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.

“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.”

Recreational use of marijuana is expected to become legal in Canada in August 2018.

According to analysts at Euromonitor International, the legalisation of cannabis in Canada sets the industry up for rapid growth, and poses the risk of cannibalising drinks sales.

However, analysts also noted that premium cannabis strains have the same appeal as ‘artisanal’ spirits. As such, premium suppliers could bridge the gap between the two industries through hybrid products and collaborations.

US drinks giant Constellation Brands last year acquired a minority stake in cannabis producer Canopy Growth Corporation for CA$245 million (US$191m) and outlined its plans to move into cannabis-based beverages.

A few weeks later, US company Puration announced its intention to take cannabis drinks to the Canadian market following legalisation this year.

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