Talk about beverages with a kick.
On Friday, The Boston Beer Company (NYSE:SAM), best known for the Samuel Adams product line, announced it is to develop nonalcoholic cannabis drinks. To do so, it is opening what it terms a "cannabis beverage research hub" in Canada. Unlike in the U.S., the sale and consumption of marijuana there is fully legal at the federal level.
With the move, Boston Beer is attempting to get its foot in the door of what promises to be a popular product segment. Many consumers would like to imbibe cannabis in some way but are reluctant to experience the harshness of the traditional method -- smoking. This is a major reason why the pot-laced comestibles market has exploded over the past few years.
"Innovation is core to what we do," Boston Beer quoted its CEO Dave Burwick as saying. "We believe non-alcoholic cannabis beverages could represent a new frontier of innovation and want to be ready for future opportunities in the U.S."
As with any marijuana product, selling in the U.S. market is tricky. Less than half of American states have legalized recreational marijuana, so the customer base for a major producer of any pot product is limited and scattershot.
Nevertheless, several prominent Democratic lawmakers have indicated they will soon push for federal decriminalization of the drug. So it's encouraging that Boston Beer is making its move in advance of this hoped-for nationwide liberalization.
Boston Beer did not provide details of its cannabis drink initiative, including potential partners on the venture or the amount of the investment the company is making into it.
But investors clearly like the idea of weed drinks next to Sam Adams in their local supermarket or convenience store. On Friday, the company's stock rose by nearly 3.9%, beating the S&P 500 index's 1.5% rise.