Did we hear it right? Is Coca-Cola really considering entering the cannabis market?
News broke today that Coca-Cola Co. is in talks with Canadian cannabis company Aurora Cannabis Inc. According to Bloomberg News, the soft drinks giant is eyeing the cannabis drinks market.
Coca-Cola admitted that it is monitoring the cannabis industry and that it is interested in developing a CBD-infused drink. CBD is short for cannabidiol, the non-psychoactive chemical ingredient found in cannabis.
If indeed the two companies finalize a deal, Coca-Cola will become the latest beverage maker to tap into the growing demand for cannabis products. Several beer companies have already partnered with cannabis firms to develop non-alcoholic cannabis-infused beer.
Coca-Cola spokesperson Kent Landers told Bloomberg that they are closely watching the growth of CBD as a functional wellness beverage ingredient. He acknowledged that the cannabis space is quickly evolving.
Discussions with Aurora is said to be focused on drinks infused with CBD to help drinkers ease inflammation, cramping, and pain. CBD is mainly used for medicinal purposes and does not give users a high, unlike the chemical component THC.
However, Landers clarified that they have not yet reached any decision or deal with Aurora.
Aurora shares rose after the Coca-Cola news
Bloomberg also reported that Aurora led cannabis stocks higher after Coca-Cola statement.
More specifically, Aurora shares jumped as much as 23 percent in New York Monday to $8.
Other pot stocks also got a boost in response to the Coca-Cola news. Tilray, for one, added as much as 9.4 percent.
The foray of beverage makers into the cannabis sector
With recreational cannabis legalization being on a roll in some states in the U.S. and in Canada, beer and beverage makers are gearing up to join the cannabis industry as sales from their traditional business are expected to slow down.
Last month, for instance, Constellation Brands Inc. — the maker of Corona craft beer — announced that it will be investing $3.8 billion to up its stake in Canadian cannabis producer Canopy Growth Corp. The beermaker and Canopy Growth are developing non-alcoholic cannabis cocktails.
There’s also Molson Coors Brewing Company’s Canadian arm, which teamed up with Canadian cannabis company Hydropothecary, now known as Hexo Corp., to build a standalone company for cannabis-infused beer.
The deal between the multinational brewing company and Hexo is expected to be finalized before the end of September.
Then you have Heineken NV’s Lagunitas craft-brewing brand, which has launched a label that specializes in non-alcoholic THC-infused drinks. Diageo PLC, which makes Guinness beer, is also in discussions with a few Canadian cannabis manufacturers regarding a possible deal.
That’s just to name a few. (To read our report on cannabis beer, Read our special report here.)