On October 4, 2018, Molson Coors Canada ("MCC"), the Canadian business unit of Molson Coors Brewing Company (NYSE: TAP) (TSX: TPX), and HEXO Corp. (TSX: HEXO) announced that they had closed the transaction announced on August 1, 2018, to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization.
The joint venture, Truss, is structured as a standalone business with its own board of directors and independent management team. MCC has a 57.5% controlling interest with HEXO holding the remaining 42.5%.
In connection with the closing of the transaction, HEXO issued to MCC 11,500,000 warrants, each of which is exercisable to purchase one common share of HEXO at an exercise price of $6.00 for a period of three years.
Headquartered in Toronto, Ontario, MCC is North America's oldest brewer and Canada's second largest brewer by volume, selling approximately one-third of the total Canadian beer market in 2017. HEXO creates and distributes innovative products to serve the Canadian cannabis market and is one of the country's lowest-cost producers.
Gowling WLG advised MCC with respect to the creation of this joint venture with a team that included Stephen McKersie, Josh Rosen and Cara Stoller (corporate/M&A); Stephen Cross and Nicole Nielsen (commercial/IP); Kathleen Ritchie (securities); Hans Schroeder and Christopher Bown (patents); Shelagh Carnegie (trademarks); Lewis Retik (regulatory); Bill MacGregor (immigration); and Laura Gheorghiu and Malya Amghar (tax).