Coca-Cola Co. says it’s moving the nascent industry and is interested in drinks infused with CBD — the non-psychoactive ingredient in marijuana that treats pain but doesn’t get you high. The Atlanta-based soft drinks maker is in talks with a Canadian marijuana producer. Aurora Cannabis Inc. to develop the beverages, according to a report.
Aurora shares spiked as much as 19 percent in early trading.
“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,”
Coca-Cola spokesman Kent Landers said in an emailed statement to Bloomberg News. “Space is evolving quickly. Declining to comment on Aurora said Landers. No decisions have been made at this particular point in time.
Pot stocks Tilray Inc., Cronos Group, and Canopy Growth gained in pre-market trading Monday in response to Coca-Cola’s interest. Tilray jumped 6.8 percent, adding to its 40 percent gain last week; Cronos rose 3.1 percent and Canopy’s U.S. shares climbed 2.9 percent. 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 US$3.8 billion. This is to increase its stake in Canopy Growth Corp. This is 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, the maker of Guinness beer. It is holding discussions with at least three Canadian cannabis producers. This is about a possible deal, BNN Bloomberg reported last month. Heineken’s Lagunitas craft-brewing label has launched a brand specializing in non-alcoholic 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 US$5.1 billion in August and has expanded into other products including juice, tea, and mineral water over the past decade.
According to the Bloomberg report, in order to ease cramping, pain, and inflammation. The discussions are highly focused on the drinks section especially the CBD-infused drinks. Often used for medicinal purposes, CBD or cannabidiol is the chemical in the pot plant. It doesn’t produce the high that comes from THC, or tetrahydrocannabinol. There are no guarantees of any deal between Aurora and Coca-Cola, according to the report.
Heather MacGregor, a spokeswoman for Aurora, said in an emailed statement that the cannabis producer has expressed 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 the green light.
Aurora is Canada’s third-largest pot company, with a market value of $8.7 billion. The Edmonton, Alberta-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. 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.