WeedMD and Phivida Holdings have signed a letter of intent to form a joint venture company called Cannabis Beverages (CanBev), which will create cannabis-infused beverages.

Phivida produces cannabidiol-based beverages and health products, and WeedMD is a licensed producer and distributor of medical cannabis based in Canada.

CanBev will operate one of the first cannabis-infused beverage production facilities in Canada at WeedMD’s greenhouse in Ontario. The joint venture will have access to 610,000ft² of production space and 25,000ft² for packaging and storage.

The deal stipulates WeedMD will be the exclusive cannabis supplier and distributor for CanBev’s cannabis-infused beverages.

WeedMD chairman Michael Kraft said: “As WeedMD builds out its production footprint, we will focus on product innovation, extending our product line and building new brands. Canadian medical consumers, especially those in seniors’ care, are interested in functional beverages as they integrate cannabis into their medical treatment plans.

“We are eager to work alongside Phivida’s world-class management team to develop cannabinoid-infused beverages and brands for both the medical and adult-use markets.”

“WeedMD provides CanBev with proven success in the Canadian health care market. Phivida provides CanBev with the opportunity to bring federally legal cannabis-infused consumer packaged goods and brands to the Canadian market.”

Under the agreement, Phivida will help the joint venture with product innovation, research and development, formulation and branding.

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Phivida president and chairman John-David Belfontaine said: “Phivida is pleased to partner with an industry leader and build towards a leadership share of the global cannabis-infused beverage market.

“WeedMD is the ideal partner for Phivida, as they will provide CanBev with the ability to distribute into the federally legal medicinal cannabis market in Canada and apply for a licence for cultivation and sales under the ACMPR.

“WeedMD provides CanBev with solid infrastructure, strong management, world class genetics and proven success in the Canadian health care market. Phivida provides CanBev with the opportunity to bring our premium cannabinoid-infused beverages to patients and consumers across Canada and bring federally legal cannabis-infused consumer packaged goods and brands to the Canadian market for the first time in the history of the industry.”

It is reported CanBev has no plans to sell any cannabis-infused products in any market outside of Canada unless or until it is legally permissible to do so at all government levels.

The joint venture company will be formally created once the two parties have finalised the definitive documentation and have received TSX Venture Exchange approval.