Cannabis Joint Venture Looks To Capitalize On Marijuana Beverages As Growing Alternative To Alcohol
Flora Growth Corp. (NASDAQ:FLGC) has formed a joint venture with Althea Group Holdings (ASX: AGH) to debut in the booming hemp-derived beverage market.
What Happened
Peak USA JV LLC is designed to capitalize on current commercial opportunities in the beverage market in the U.S.
It will utilize and combine Flora’s U.S.-based CPG team with Althea’s Peak Processing Solutions – which is a recognized operator in the cannabis-infused beverages space. Peak has a 40% market share in Canada.
Moreover, the new collaboration will combine Flora’s brand-launching expertise with Althea’s processing experience to "produce the next generation of beverages for the U.S. market," Flora said in a press release.
Why It Matters
Flora Growth CEO Clifford Starke explained what the new partnership with Althea means for the company.
“Aligning with Althea instantly bolsters our credibility within the beverage sector," Starke said. "Their very special, world-class emulsion technology has established the very foundation of this category. Coupled with our expertise in brand development, sales, and marketing, this partnership will position us as a frontrunner in the market, setting a standard that competitors will find challenging to emulate."
Cannabis As An Alternative To Alcohol
Starke said, their goal is to provide an "alternative to alcohol," and "establish a nationwide brand.”
Just recently, the number of people consuming cannabis daily or almost daily has overtaken those who drink alcohol with the same frequency for the first time in U.S. history, according to a new study published in the journal Society for the Study of Addiction.
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Joshua Fegan, Althea’s CEO and managing director seconded Starke. "With our combined expertise and shared vision, we are poised to drive success and create lasting value for our stakeholders,” he said on Tuesday.
Flora recently signed an exclusive distribution agreement with Althea Group Holdings for Vessel brands in the United Kingdom and also entered an exclusive distribution agreement with Me Raw Trade Ltd. to distribute both JustCBD and Vessel-branded products in Poland.
FLGC Price Action
Flora Growth's shares traded 2.50% lower at $1.17 per share at the time of writing on Tuesday morning.