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Aug 27, 2018

Snack makers 'lurking' for cannabis partners, consultant says

Pot-infused drinks are the next big thing a year from now: Cannabis Compliance

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The race is on for alcohol producers to secure partners in Canada's cannabis industry as legalized recreational use looms in October, and one industry consultant says the hunt for partnerships is also already on for major snack makers.

"We're clearly seeing a lot of interest from CPG (consumer packaged goods) companies," said Deepak Anand, vice-president of business development and government relations at Cannabis Compliance Inc., in an interview with BNN Bloomberg.

"I can tell you we've had a number of clients from the CPG world that are very interested in this space and they're clearly lurking at this point."

Shares of major pot producers surged on Friday with industry bellwether Canopy Growth Corp. rising almost eight per cent to an all-time high and Aphria Inc. soaring as much as 23.8 per cent after BNN Bloomberg reported Diageo Plc is in talks with at least three cannabis companies.

The distiller's interest comes amid a series of cross-industry deals. Constellation Brands Inc. announced on Aug. 15 it will raise its stake in Canopy to 38 per cent, and could eventually boost its ownership interest above 50 per cent. Meanwhile, Molson Coors Canada unveiled a partnership agreement with Hydropothecary Corp. on Aug. 1.

While adult marijuana use will be legal as of Oct. 17, Health Canada has indicated legal edible consumption will have to wait up to 12 months to be regulated in this country. Even so, the wait isn't deterring cookie and chip makers from scouring this country for partners, according to Anand.

"I think the thing about Canada is we're doing this in a federal level, so that really changes the game for a lot of these people,” he said.  “We're absolutely going to see CPG and other companies get into this space sooner rather than later."