Investing.com -- Splash Beverage Group Inc (AMEX:SBEV) stock dropped 12.7% in premarket trading Tuesday after the company announced a joint venture with B.A.A.D Ventures LLC to expand into the hemp-based THC beverage category.
Under the terms of the agreement, Splash will hold a 51% ownership interest in the venture, with B.A.A.D owning the remaining 49%. The partnership will focus on Nimbus, a 10 mg hemp-derived THC flavored seltzer that has reportedly shown strong early market performance.
The joint venture formalizes over three months of coordinated work between the companies and aims to combine Splash’s brand-building expertise and distribution networks with B.A.A.D’s existing THC beverage brand and production capacity.
"The THC beverage category is expanding at an extraordinary speed, and this partnership with the team at Nimbus and BAAD puts us meaningfully ahead of the curve," said William Meissner, President and Chief Marketing Officer at Splash.
The companies plan to expand Nimbus into six additional states immediately, followed by broader rollouts in states that permit direct-to-consumer shipment of hemp-derived THC beverages. The joint venture also intends to develop additional brands across key sub-categories of the THC beverage market.
Despite the company’s optimistic outlook on the partnership, investors appeared to react negatively to the news, sending shares lower in early trading.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
