Marijuana Business Magazine January 2019

January 2019 | 97 CannTrust to control two of its largest expenses and keep production costs low. Breakthru Partnership CannTrust partnered with New York- based Breakthru to distribute its products because it has a track record of building good relationships with retailers. Breakthru—whose clients include Red Bull, Constellation Brands and Diageo—is one of North America’s largest alcohol brokers of premium spirits, wine and beer brands. “Breakthru is the country’s leader in representing top beverage alcohol brands in the marketplace,” Zietlow said. “Their progressive model, sales technology, infrastructure and extensive relationships across Canada make them an ideal fit for CannTrust’s business strategy.” The cannabis sales brokerage operation is part of a newly formed subsidiary of Breakthru Beverage Group and is separate from its alcoholic beverage brokerage, Breakthru Beverage Canada. CannTrust hopes to leverage Breakthru’s North American business insights, strategies, technology and analytic tools to stand out in the marketplace. In addition to serving as a distribution partner, Breakthru has invested in CannTrust. An affiliate of Breakthru Beverage Group invested roughly $7 million (CA$3 million) in CannTrust, with an option to boost its stake if the Canadian cultivator exceeds certain sales thresholds. Though marijuana is legal across the country, Canada’s provinces are dictating whether it’s sold through privately owned dispensaries or government-operated stores. Some provinces are implementing public-private partnerships to run the shops. CannTrust is working directly with the provinces to facilitate supply agreements. Kindred, a wholly owned subsidiary of Breakthru Beverage Group, will represent CannTrust’s cannabis products to Canada’s adult consumer market. “We believe our partnership with Breakthru will help us develop our retail channel,” Zietlow said. “Our partnership with Kindred allows us to hit the ground running, utilizing their proven business model, sales technology, infrastructure and extensive relationships across Canada.” Cultivation Rooms