Canadian Alcohol Broker Signs With CannTrust to Distribute Cannabis Nationwide


Rachelle Gordon

September 13th, 2018

Uncategorized


There’s been big buzz regarding the infused beverage category within the legal cannabis space, particularly for alcohol companies looking to enter a booming market amid declining sales. The most recent example of the newfound synergy between booze and pot is the announcement that major Canadian beer, wine, and spirits broker BreakThru Beverage Group has entered into an exclusive partnership with CannTrust Holdings Inc. (TSX: TRST), one of the country’s top licensed producers of cannabis. The news comes on the heels of major investments in Canadian cannabis from Big Alcohol leaders such as Constellation Brands and Molson Coors and newfound blessings from wholesalers in the United States. 

“Breakthru was the first nationally established beverage alcohol broker in Canada and is the country’s leader in representing top beverage alcohol brands in the marketplace,” said Brad Rogers, President of CannTrust, in a press release. “Their progressive model, sales technology, infrastructure and extensive relationships across Canada make them an ideal fit for our business strategy.”

The agreement comes with a hefty investment in CannTrust by Breakthru, and calls for the establishment of cannabis-specific brokerage company. The companies aim to be ready to hit the ground running when adult-use sales become fully legal across Canada on October 17th. The LP has now secured nationwide distribution for its three recreational brands, announcing this week they had procured supply agreements in the Atlantic provinces of New Brunswick, Newfoundland, Nova Scotia, and Prince Edward Island.

“Our portfolio strategy has been well received with provincial boards and has resulted in listings across all brands,” Rogers said in a statement. “The momentum will only grow as we begin to share our quality products with Canadians across the country in October.”

According to the press release, “Breakthru will be purchasing 902,405 common shares of CannTrust at a purchase price of $10.23 per share for gross proceeds of $9,231,600. In addition, the affiliate of Breakthru Beverage Group will have options to purchase from CannTrust up to an additional 2,000,000 common shares in the aggregate at a price per share equal to a 15% discount of the 5-day volume-weighted average price on the TSX immediately prior to the date the applicable option is exercised, if CannTrust exceeds certain sale thresholds.”

 

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Rachelle Gordon

About Rachelle Gordon

Rachelle Gordon is a Minneapolis-based writer. Find her online at www.rachellegordon.net.


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