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Creso Pharma to generate new revenue stream through cannabis beverage market

The CLV joint venture will immediately start developing a premium four-beer range.

Picture of glasses of beer
CLV's JV follows Constellation Brands' US$200 million investment in cannabis drinks

Creso Pharma Ltd (ASX:CPH) has launched its new joint venture company with LGC Capital Ltd (TSXV:LG) and Baltic Beer Company Ltd, effectively providing the vertically integrated cannabis group with a new revenue stream.

This is aimed at capitalising on the fast-growing cannabis and hemp-derived beverage markets.

The joint venture company, CLV Frontier Brands, intends to develop and globally commercialise a portfolio of cannabis and hemp-derived alcoholic and non-alcoholic beverages.

CLV will establish a pilot brewery facility in Tallinn, Estonia which will develop innovative recipes, proprietary knowledge and IP which will be registered by the group.

Creso Pharma to contribute €150,000 start-up capital

Under the terms of the joint venture agreement between Creso Pharma and LGC Capital the two companies will initially contribute €150,000 in start-up capital to CLV.

Baltic Beer Company will contribute the equivalent sum by way of services.

It is proposed that CLV will immediately start developing an initial premium four-beer range containing unique cannabis terpene mixes as well as other innovative ingredients.

Maiden commercial sales planned for third quarter of 2018

CLV expects to ship the first test batch of four different beers in April/May 2018, with commercial sales forecast to commence in the following quarter.

Potential distribution partners have been identified in Europe, East Asia, Central and Latin America, Canada, Africa, Australia and New Zealand.

CLV also plans to expand its portfolio into other alcoholic and non-alcoholic beverages, seemingly at an opportune time judging by market activity.

Industry undergoing strong growth

In October 2017, global beverage conglomerate Constellation Brands (NYSE:STZ) took a 9.9 per cent stake in cannabis group, Canopy Growth, for a total of US$200 million with a view to developing and marketing cannabis-infused drinks.

Data released by globenewswire.com indicates that the global craft beer market will deliver compound annual growth of circa 11% between 2017 and 2021.

Quick facts: Creso Pharma Ltd

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Market: ASX
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