- Althea Group (AGH) strikes a deal with a subsidiary of The Boston Brewing Company (BBC) to develop some cannabis-based alcohol-free beverages
- Althea’s Canadian subsidiary, Peak Processing Solutions, signs the deal, which is worth a potential US$3.42 million (A$4.68) over its five-year term
- Under the deal, Peak will become the exclusive manufacturer of all cannabis-infused beverages to be sold under the BBC brand
- Peak also has the first right of refusal to commercialise any of its intellectual property in connection with its product development outside of Canada
- Althea shares are up 12.77 per cent and trading at 26 cents each at 1:38 pm AEST
Althea Group (AGH) has struck a deal with a Canadian subsidiary of The Boston Brewing Company (BBC) to develop some cannabis-based alcohol-free beverages.
The five-year deal was signed by Althea subsidiary Peak Processing Solutions, which will research and develop different formulations and recipes for the new line of BBC cannabis products.
Moreover, Peak will become the exclusive manufacturer of all cannabis-infused beverages sold under the BBC brand. Althea said WeedMD Rx, a subsidiary of Entourage Health Corp, will supply the cannabis input materials needed for production.
Under today’s deal, the BBC subsidiary will pay up to US$2 million (A$2.73 million) in funding to help with the development of the project. Meanwhile, Peak will also be paid at least US$285,000 (A$389,600) per year for the duration of the contract, meaning there’s a potential minimum of US$3.42 million (A$4.68 million) up for grabs.
Althea CEO Josh Fegan said the company is excited to be partnering with Entourage and an “alcohol giant” like The Boston Beer Company.
“This project is further validation of Peak’s significant and unique capabilities in the recreational cannabis industry and the latest in a growing list of deals Peak has signed with high quality customers, including seven North American publicly listed companies,” Mr Fegan said.
“AGH is very optimistic about the cannabis-infused beverage category and Peak remains well-positioned to capitalise on the recreational cannabis boom in general.”
The Head of Cannabis for BBC’s Canadian arm, Paul Weaver, spoke highly of Peak’s “world-class” facility in Canada.
“Their unwavering commitment to quality us what we look for in our partners,” Mr Weaver said of Peak and WeedMD.
“We are exited to begin making some amazing drinks together.”
The Boston Brewing Company trades on the New York Stock Exchange in a US$7 billion (A$9.6 billion) market cap.
According to Althea, Peak’s large-scale independent processing facility is one of the first of its kind in Canada, specialising in developing, manufacturing and distributing recreational cannabis products.
The company said a recent Million Insights report predicted the cannabis beverage market will hit US$2.8 billion (A$3.8 billion) by 2025.
Under today’s deal with BBC, Peak has the first right of refusal to commercialise any of its intellectual property in connection with its product development outside of Canada by acting as BBC’s exclusive provider.
Althea shares were up 12.77 per cent and trading at 26 cents each at 1:38 pm AEST. The company has a $69.5 million market cap.