What?
After the market closed on Friday, Canadian cannabis producer MedReleaf Corp. (TSX:LEAF) announced the launch of its first adult-use recreational cannabis brand San Rafael ’71, which is “inspired by and designed to celebrate the spirit of classic cannabis culture.”
So what?
To introduce the San Rafael ’71 brand to Canadians, MedReleaf has partnered with Amsterdam Brewing, a small craft brewery located in Toronto, to develop and launch its first product, 4:20 Pale Ale.
Now, even though the 4:20 Pale Ale may sound like a cannabis-infused beer, it’s actually just a cannabis-flavoured beer. Darren Karasiuk, the vice president of Strategy at MedRleaf, explained the reasoning behind this product launch with the following statement:
“While cannabis aficionados eagerly anticipate the day they can buy legal products, we thought we’d offer the San Rafael ’71 Pale Ale for them to enjoy while they wait … San Rafael ’71 4:20 Pale Ale does not contain any cannabis, but it will take you back to where it all began and introduce Canadians to the spirit of adventure, exploration and freedom at the heart of 4:20.”
MedReleaf went on to state that “a full suite of San Rafael ’71 products and experiences will be introduced to the marketplace as regulations allow,” and Neil Closner, its CEO, elaborated on this when he stated the following:
“As we have said before, MedReleaf intends to fortify and extend its leadership position in the industry beyond the medical market. The launch of San Rafael ’71 is the first of many steps on this front including a portfolio of brands and products that leverage the company’s award-winning product selection, quality, and innovation.”
Now what?
MedReleaf is known as one of Canada’s premier producers of medical cannabis, so making a move into the recreational cannabis market makes complete sense, and I’m actually surprised it took the company this long to do it.
I think the launch of the 4:20 Pale Ale is a smart way to get the San Rafael ’71 brand in front of consumers, and I think it could evolve into something much more than a little marketing gimmick; I think partnering with a craft brewer is incredibly strategic for MedReleaf, especially after all the attention that was given to Canopy Growth Corp. (TSX: WEED) following a $245 million investment by Constellation Brands Inc. (NYSE: STZ) to acquire a 10% stake in the cannabis producer to explore the potential of creating cannabis-infused beverages.
Granted, Amsterdam Brewing is so small that it shouldn’t even be mentioned in the same paragraph as Constellation Brands, but I think that any brewer and brand, large or small, has the potential to make a big splash and make a name for itself in a new product category, which is exactly what cannabis-infused beverages will be following the legalization of recreational cannabis, which is expected to occur later this year.
There’s no doubt in my mind that the cannabis industry will experience explosive growth in the years ahead, and I think Canopy Growth Corp., Aphria Inc., Aurora Cannabis Inc., and MedReleaf have set themselves apart as four of the best ways to invest in it.
