WeedMD Inc., a reputed firm manufacturing and distributing medical cannabis across Canada, and Phivida Holdings Inc., have reportedly formed a joint venture. The combined company referred as Cannabis Beverages Inc. or CanBev aims to produce cannabis infused beverages. As per sources, the joint venture is likely to commence production in Strathroy in Ontario at WeedMD’s 610,000 square feet facility.
The key officials of both the firms have stated that the new manufacturing establishment will focus on producing, marketing, and distributing cannabis infused drinks across the medical sector & the adult-use marijuana industry. According to sources, WeedMD will be offered the exclusive rights to distribute cannabis infused beverages manufactured by the combined entity.
Phivida Holdings, on the other hand, is expected to carry out activities related to research and development, new product development, designing, and branding, as per the terms of the agreement signed between both the Canada-based firms. Phivida will apparently be providing a license to CanBev for using its encapsulation technologies. These technologies will be used to target consumer segments across the adult-use cannabis sector and even bring about improved bioavailability and solubility. Experts view licensing as a part of Phivida’s business strategy to improve the brand equity of its own product.
CanBev has, however declared that it will not sell any of its products across the U.S. or other regions till the Canadian government permits it to do so. Reports state that the joint venture pact is subject to both the firms agreeing to complete the required documentation & TSX Venture Exchange approval.
The parallel co-branding strategy executed by both the firms will enable them to reduce the cost of new product launches, claim analysts. Further on, it is even being speculated that in a not-so-clearly-defined product category, such as cannabis, such tactics are likely to help the participating companies generate more business for the distinct product.