Largest U.S. Liquor Distributor to Rep Cannabis Nationwide in Canada

Aphria, Southern Glazer's Distribution Deal, mg Magazine, May 2018

TORONTO – A division of the largest wine and spirits distributor in the U.S. has secured exclusive distribution rights for a large Canadian manufacturer’s adult-use cannabis products.

Great North Distributors Inc., a new, wholly-owned Canadian subsidiary of Miami-based Southern Glazer’s Wine & Spirits, will act as the nationwide manufacturer’s representative for Aphria Inc. once recreational use is legalized. Retail sales of recreational cannabis are expected to begin by September 1.

Great North was established specifically to handle cannabis sales and distribution. According to parent company Southern Glazer’s, Great North already has established a network of privately and provincially owned retailers in every Canadian province.

“With this agreement, Aphria has established an unparalleled sales network and will hit the ground running from the very first day of legal adult-use sales,” said Jakob Ripshtein, chief commercial officer for Aphria, which reported $20 million in medical marijuana revenue for 2017. “Great North Distributors provides us with an experienced, dedicated team with a proven track record of driving sales and exceptional performance across all provinces. This deal will ensure that Aphria’s brands and products are proudly represented by cannabis retailers throughout the country.”

The product of a 2016 merger between Miami-based Southern Wine and Spirits and Dallas-based Glazer’s, Southern Glazer’s has operations in 44 U.S. states and the District of Columbia, Canada, and the Caribbean, and employs more than 21,000 people. Headquartered in Miami, the company’s sales portfolio is 45-percent wine and beer and 55-percent spirits.

The deal makes the company the first beverage alcohol distributor to target the legal cannabis industry, but it is not the first to attempt to combine cannabis and alcohol under one umbrella. In February, Edmonton, Alberta-based Aurora Cannabis took a 20-percent stake in Canadian retail chain Liquor Stores N.A. Ltd. The retailer recently changed its name to Alcanna to reflect its new dual focus. Last fall, international beer, wine, and spirits producer Constellation Brands invested C$245 million in a 10-percent stake in Canopy Growth Corp. The two companies are developing cannabis-infused beverages.

In July 2017, Toronto-based startup Province Brands filed a provisional technology patent for the “world’s first beers brewed from the cannabis plant.” The company has received C$300,000 in funding from the government of Ontario.

Canadian bank CIBC estimates Canada’s legal cannabis market could reach C$6.5 billion in sales by 2020.