The Coca-Cola Company may be the next major player to move into the business of drinkable cannabis.
The Company is interested in drinks infused with the non-psychoactive part of marijuana, known as CBD, which is used to treat pain but does not produce the same high as smoking weed. There are currently talks between Aurora Cannabis Inc., a Canadian marijuana producer, and Coca-Cola to develop the CBD infused drinks.
Kent Landers of Coca-Cola told Bloomberg news Coke is watching the use of CBD in the beverage world. He said “The space is evolving quickly. No decisions have been made at this time.”
Coke is only one of several beverage companies testing out this market. It was announced last month Constellation Brands Inc., the company behind Corona beer, will invest $3.8 billion into its stake in the Canadian based marijuana producer Canopy Growth Corp. Canopy has a value that exceeds $10 billion.
A joint venture has been put in place between Quebec’s Hydropothecary Corp. and Molson Coors Brewing Co. to develop drinks. The maker of Guinness beer, Diageo PLC, is in talks with at least five cannabis companies based in Canada about the possibility of working together. The craft beer label Lagunitas, out of Heineken NV, has created a brand making THC, the active ingredient in marijuana, infused non-alcoholic drinks.
It is not a new move for Coca-Cola to be diversifying. The company, known for its brands Sprite and Powerade, will be acquiring Costa Coffee in August for $5.1 billion. Coca-Cola has also expanded over the past decade into juice products, tea, and water as a means of diversifying due to the slow decline of soda consumption.
Though there is no guarantee of a deal between Coca-Cola and Aurora, the focus is strictly on CBD-infused drinks. CBD, or cannabidiol, is the part of the plant used for medical purposes. The THC, or tetrahydrocannabinol, is the part of the plant where the high comes from. The companies want to produce a drink that uses the CBD to ease pain, cramping, and inflammation.
Aurora has expressed specific interest the infused-beverage market. This comes directly from Aurora spokeswoman, Heather MacGregor.
The first marijuana medical treatment will soon be available to the U.S. market. The approval came in June to GW Pharmaceuticals Plc for an epilepsy treatment. This shows the growing acceptance of treatments derived from CBD despite marijuana still being illegal at the federal level.
The cannabis market is soaring in Canada. Aurora, based in Edmonton Alberta, has a market value of C$8.7 billion. Canada is preparing to legalize cannabis on October 17, becoming the first G7 nation to do so.
Though dropping 24 percent this year, the BI Canada Cannabis Competitive Peers Index has more than doubled in the last 12 months. There is concern that the stocks are overvalued.