Article by Mark Rendell, Globe and Mail
Toronto craft brewer Ace Hill has partnered with Kelowna-based cannabis grower The Flowr Corp. to market a line of pre-rolled joints in Ontario and British Columbia, in a kind of brand licensing deal that appears to be the first of its kind in the Canadian cannabis industry.
Ace Hill, a millennial-focused beer and alcoholic drinks company, won’t actually touch the product. But two cannabis strains grown, packaged and shipped by Flowr will be branded and marketed by Ace Hill’s newly-minted sister company Ace Valley. Under Health Canada’s packaging regime, companies can include one brand element on their products.
“We don’t really think about it as cross-branding or cross-promotion,” said Mike Wagman co-founder and CEO of Ace Hill and Ace Valley. “It’s from the same team, but we set up a new company, we developed a new brand identity … and all the marketing and brand building will be fully compliant [with Health Canada regulations].”
The conversation around cannabis and alcohol companies has tended to focus on blockbuster deals like Constellation Brands Inc.’s $5-billion investment in Canopy Growth Corp., or Molson Coors Brewing Company’s joint venture with HEXO Corp. At a more modest and regional level, however, there are conversations happening between smaller LPs looking for brand traction and craft brewers eager to tap new revenue streams.
In the case of Ace Hill, the focus isn’t even on creating a line of cannabis-infused beverages, at least at first.