Distribution Giant Breakthru Buys Into Marijuana With CannTrust Deal

By Neat Pour Staff |

Another booze company is getting in on the weed game. This time, it’s a wholesaler not a producer forging a partnership. On Monday (9.10), super-distro Breakthru announced a letter of intent to invest some $9.2 million in Canadian cannabis producer CannTrust.

The cornerstone of the deal will be the creation of a new “cannabis-focused sales brokerage company and develop a route-to-market platform” according to a release. The new division will do business only in Canada and operate as autonomously from the alcohol wholesale arm. (Marijuana is still not federally legal in America—making it of-limits domestically to national corporations—for now.)

“Breakthru was the first nationally established beverage alcohol broker in Canada and is the country’s leader in representing top beverage alcohol brands in the marketplace.” said Brad Rogers, President of CannTrust in a statement. “Their progressive model, sales technology, infrastructure and extensive relationships across Canada make them an ideal fit for our business strategy.”

Breakthru is the product of a 2015 merger between Chicago’s Wirtz Beverage Group and New York’s Charmer Sunbelt Group. The wholesaler operates across North America including 13 U.S. states, Washington D.C., and Canada, where they are the largest distributor in the nation. Accordingly their portfolio is immense, including Diageo, William Grant & Sons, Brown-Forman, Constellation, MillerCoors, and Gallo as well as ultra-lux brands like Silver Oak and WhistlePig.

Founded in 2014, CannTrust is a large cannabis manufacturer with a full one of medicinal products such as THC capsules as well as three new recreational lines: liiv, Xscape and Synr.g. The company plans to have 600,00 square feet go operational grow space within a year.

Specifically, Breakthru Beverage Group will be purchasing 902,405 common shares of CannTrust at a purchase price of $10.23 per share for gross proceeds of $9,231,600. On top of that, the company will have an option to buy another two million shares. The deal is still pending regulatory approval.

Marijuana legalization has set off a bit of a gold rush among alcohol giants in the past year. Constellation recently bought into a Canadian partner of their own and Diageo is reportedly eying a deal.

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By Neat Pour Staff