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Breakthru Beverage Group joins cannabis distribution market

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One of North America's biggest alcohol distributors, Breakthru Beverage Group, is to open up a Canadian unit focussed solely on cannabis.

Breakthru Beverage will set up a Canadian cannabis subsidiary

Breakthru Beverage will set up a Canadian cannabis subsidiary

The move, which will see Breakthru distribute products for Canadian cannabis company CannTrust, follows a similar play from rival alcohol distributor Southern Glazer's Wine & Spirits in May. Both companies say they are getting into the fast-growing cannabis market because regulations for the recreational distribution of the drug in Canada will be similar to those in place for beverage alcohol.

Canada is set to allow the sale of recreational cannabis products from 17 October after decriminalising its use nation-wide earlier this year.

Breakthru Beverage said today it is to establish a cannabis-focused sales brokerage company and develop a route-to-market platform for CannTrust in Canada. CannTrust is developing a range of recreational cannabis products set to be available next year, including a cannabis-infused beverages neutral in taste and clear as water. As part of the distribution arrangement, Breakthru will purchase a CAD9.2m (US$7m) stake in CannTrust.

Breakthru's cannabis sales brokerage operation will be part of a newly-formed subsidiary of the company and will be entirely separate from its beverage alcohol brokerage, Breakthru Beverage Canada. In most Canadian provinces, alcohol and cannabis markets are to be kept separate.

Commenting on today's news, Danny Wirtz, vice-chairman of Breakthru Beverage said it is "a logical extension of our expertise and provides a new growth opportunity into this emerging market".

Southern Glazer's Wine & Spirits was the first alcohol distributor to enter the North American cannabis market, creating the Canadian cannabis subsidiary Great North Distributors. Its first client is Canadian adult-use cannabis manufacturer Aphria.

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