Molson Coors is getting out of cannabis in the U.S., claiming that its uncertain legal status makes the business untenable.
The brewer announced Nov. 16 that it is terminating its joint venture with Hexo Corp., a Canadian marijuana producer. The venture, called Truss CBD USA, brought sparkling water infused with CBD, a non-psychoactive component of cannabis, to market early last year.
Molson Coors said in its announcement that the uncertain legal status of CBD and cannabis in general in the U.S. is driving it out of the market. Cannabis is fully legal in 25 states and the District of Columbia, but it remains illegal on the federal level, which puts severe crimps in its use as an industrial-level ingredient.
“[T]here remains no near-term pathway to federal legalization, leaving uncertainty in the market,” the Molson Coors statement reads. “That’s left some chain retailers and distributors hesitant to accept CBD beverage brands, complicating distribution and making the path to profitability a challenge.” The Truss joint venture will terminate at the end of this year.
In addition, Molson Coors is ending its distribution agreement with La Colombe Coffee Roasters, effective March 31.
Molson Coors had been distributing La Colombe’s ready-to-drink coffee products in drugstores, convenience stores and big-box retailers since January 2021. However, La Colombe is seeking to consolidate distribution of its RTD coffee with its dry coffee and other products, which would create “significant logistical challenges,” according to the company statement.