Coca-Cola looks to unscrew the cap on cannabis beverages
Company eyes making drinks infused with CBD, the marijuana chemical that treats pain
The world’s largest beverage company may be the next industry giant to jump into the cannabis drinks business.
Coca-Cola Co. says it’s monitoring the nascent industry and is interested in drinks infused with CBD — the nonpsychoactive ingredient in marijuana that treats pain but doesn’t get you high. The Atlanta-based soft-drinks maker is in talks with Canadian marijuana producer Aurora Cannabis Inc. to develop the beverages, according to a report from BNN Bloomberg Television.
“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesperson Kent Landers said in an emailed statement to Bloomberg. “The space is evolving quickly. No decisions have been made at this time.” Landers declined to comment on Aurora.
Pot stocks Tilray Inc., Cronos Group and Canopy Growth Corp. gained in premarket trading Monday in response to Coca-Cola. Tilray jumped 6.8 per cent, adding to its 40 per cent gain last week; Cronos rose 3.1 per cent and Canopy’s U.S. shares climbed 2.9 per cent.
Coke’s possible foray into the marijuana sector comes as beverage makers are trying to add cannabis as a trendy ingredient while their traditional businesses slow. Last month, Corona beer brewer Constellation Brands Inc. announced it will spend $4.95 billion to increase its stake in Canopy, the Canadian marijuana producer with a value that exceeds $13 billion.
Molson Coors Brewing Co. is starting a joint venture with Quebec’s Hydropothecary Corp. to develop cannabis drinks in Canada. Diageo PLC, maker of Guin- ness beer, is holding discussions with at least three Canadian cannabis producers about a possible deal, BNN Bloomberg reported last month. Heineken NV’s Lagunitas craft-brewing label has launched a brand specializing in nonalcoholic drinks infused with THC, marijuana’s active ingredient.
Coca-Cola has already been diversifying as consumption of soda continues to decline. The company, with its iconic brands ranging from Coke and Sprite to Powerade, announced it will acquire the Costa Coffee chain for $5.1 billion in August, and has expanded into other products including juice, tea and mineral water over the past decade. Heather MacGregor, a spokesperson for Aurora, said in an emailed statement that the cannabis producer has ex- pressed specific interest in the infused-beverage space, and intends to enter that market, BNN Bloomberg ’s David George-Cosh reported. While marijuana remains illegal at the national level in the U.S., there is growing acceptance of the use of CBD derived from marijuana to treat illnesses ranging from chronic pain to anxiety and epilepsy.
The first-ever medical treatment derived from a marijuana plant will hit the U.S. market soon, after regulators in June gave an epilepsy treatment by GW Pharmaceuticals Plc the green light.
Aurora is Canada’s third-largest pot company, with a market value of $8.7 billion. The Edmonton-based company has soared along with other pot stocks in Canada as the country gears up to become the first Group of Seven nation to legalize cannabis on Oct. 17. The BI Canada Cannabis Competitive Peers Index has more than doubled in the past 12 months, though has dropped 24 per cent in 2018 on concern that the stocks are overvalued.