Pubdate: Wed, 02 Nov 2016
Source: Montreal Gazette (CN QU)
Copyright: 2016 Postmedia Network Inc.
Contact:  http://www.montrealgazette.com/
Details: http://www.mapinc.org/media/274
Author: Ross Marowits
Page: B7

MOLSON COORS CONSIDERS EFFECT OF LEGAL MARIJUANA

Brewer looks to state of Colorado where pot is legal for guidance:
CEO

Molson Coors says it is looking to Colorado for insight on the
possible effects the legalization of marijuana in Canada could have on
its beer sales.

Stewart Glendinning, CEO of Molson Coors International, was asked by
an analyst Tuesday during the company's quarterly earnings conference
call for his opinion on the potential impact the legalization of
marijuana could have on Canada's beer sector.

"Cannabis is something we are thinking very carefully about, not only
as a business but also as an industry," Glendinning, who was the
former head of Molson Coors' operations in Canada, said in response.

"There's just a lot we don't know at the moment . ... It's steady as
she goes because of the lack of clarity about the deployment of the
drug itself."

It's not clear whether Glendinning 's comments are a signal that
Molson Coors views a recreational marijuana industry as a threat or
opportunity. He did not elaborate and the company did not return calls
seeking clarification.

But during the call, Glendinning said Molson Coors is looking to
Colorado, the state where the recreational use of marijuana was
legalized in 2013 and where the company is headquartered, for guidance.

The federal government has said it plans to introduce a bill in the
spring to legalize the recreational use of marijuana.

Stephen Beaumont, an industry watcher and Canadian author on beer
trends, said the Colorado breweries he follows have not reported any
impact on sales.

"It could be one of those things that hit more at mass-market
breweries because if someone wants to get a buzz on instead of buying
Coors Light, they'll buy some weed," he said.

Brittany Weissman, an analyst with Edward Jones, said any possible
effect from marijuana legalization in Canada on Molson Coors' beer
sales will be mitigated. She said that's due to the fact that Canada
represents a smaller share of the company's market.

Meanwhile, Molson Coors said weaker sales in Canada contributed to a
decrease in overall adjusted profits for the third quarter.

The Montreal-and Denver-based brewery says its underlying profits
decreased 14.3 per cent to US$222.7 million in the three months ended
Sept. 30, from US$259.9 million a year ago.

Net income for the three months ended Sept. 30 was US$202.5 million,
up from US$16.6 million a year earlier, when it recorded US$275
million of impairment charges for some European brands.

Overall revenues fell 6.9 per cent to US$947.6 million on lower beer
volumes including its flagship Coors Light brand.
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MAP posted-by: Matt