Altea Group Holding (ASX: AGH)’s subsidiary Peak Processing Solutions has entered into a new agreement that will see the company developing a range of cannabis beverages for Canada’s recreational cannabis market.
The company announced to shareholders earlier this week that Peak will be part of a new project with BBCCC – a subsidiary of The Boston Beer Company (NYSE: SAM). As part of the agreement, Peak will research and develop recipes for BBC’s new line of cannabis drinks. These drinks will be non-alcoholic but will contain cannabis. The cannabis for the drinks will be supplied by WeedMD Rx – a subsidiary of Entourage Health Corp (TSX-V: ENTG / OTCQX: WDDMF).
Peak will manufacture the cannabis in their Canadian manufacturing facility. This facility was the first large-scale processing facility of its kind in Canada. It is still a new operation, as it only received its license in September 2020.
In exchange for their work, BBC has agreed to pay Peak up to $US2 million in funding (roughly $AU2.72) and a minimum of $US285,000 for each year of the agreement. Together, this will net Peak a total of $US3.42 million ($AU4.64 million) in revenue. BBC has also agreed to make Peak their exclusive manufacturer of cannabis drinks within the Canadian market.
This is the third major cannabis-infused beverages project that Peak announced in the past eighteen months, as they entered into agreements with Blum Beverages and the Tinley Beverage Company last year. Peak’s other projects have been very successful, as one of their customers had the highest-selling cannabis beverage in Ontario just weeks after their cannabis-infused drinks were released.
Naturally, their new project should be very favourable for Althea and its shareholders (though the company is already doing very well, as their revenue grew by 175% in the first half of FY20/21).
Althea’s CEO, Josh Fegan, has also described the deal as “validation” of Peak’s success.
This project is further validation of Peak’s significant and unique capabilities in the recreational cannabis industry…
Unfortunately for Australians, Peak’s new drinks will only be available in Canada. However, the cannabis-infused beverage market may reach our shores one day, as the global market should grow to $US2.8 billion in 2025.