Coca-Cola says it's looking at potential cannabis drinks business

Andrew Cummings
September 18, 2018

Coke's interest was first reported by Bloomberg, which said the company was in talks with Aurora Cannabis, a Canadian cannabis company.

Coca-Cola in "serious conversation" with Aurora Cannabis about producing marijuana-infused drinks.

"The space is evolving quickly", Coke said. "No decisions have been made at this time".

According to the above-linked report, Coke is in talks with Aurora Cannabis, Canada's third-largest pot company.

Coca-Cola's potential foray into marijuana beverages follows a two investments by Constellation Brands, the conglomerate behind drinks like Corona and Svedka, totaling more than $4 billion, into Canopy Growth, the largest publicly traded marijuana firm.

Besides Aurora, she said cannabis companies Tilray TLRY.O and Aphria APH.TO were likely targets for partnerships with big consumer companies looking to get into the market.

Hard on the heels of a $5.1-billion deal to buy Costa Coffee last month, analysts said a move into marijuana-infused drinks fit with Coke's moves toward a healthier product portfolio.

Canada officially legalised the use of recreational cannabis back in June and apparently the United Kingdom could follow suit within five years.

CBD, or cannabidiol, is the ingredient in marijuana that may help some health problems like pain, inflammation and insomnia. "There is so much happening in this area right now and we think it has incredible potential", said Aurora's director of communications Heather MacGregor in an emailed statement. This push for product diversification is perhaps also what could give the company an edge in the cannabis-infused beverages business.

The beverages in question wouldn't focus on THC, the psychoactive component of marijuana of which Coke has no interest, but rather CBD, which is widely used in wellness products.

Although Canada is gearing up to legalize marijuana for recreational use on October 17, beverages infused with the plant's active ingredients won't be legal until sometime in 2019.

The Edmonton-based company's stock briefly rose above the $10 mark in early trading after the report by BNN Bloomberg, citing sources. The BI Canada Cannabis Competitive Peers Index has more than doubled in the past 12 months, though has dropped 24 percent in 2018 on concern that the stocks are overvalued.

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