Coca-Cola has responded to widespread speculation it is interested in producing CBD (cannabidiol)-infused beverages, writing that it is "closely monitoring" the fast-growing market segment.
The company released the short, tersely worded statement which denied it had any interest in commercialising cannabis or marijuana products.
It did, however, leave the door open for beverages infused with CBD (or cannabidiol). “Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” it read.
“The space is evolving quickly. No decisions have been made at this time.”
Coca-Cola says it is interested in drinks infused with CBD—the non-psychoactive ingredient in marijuana that treats pain but doesn’t get you high https://t.co/1XjmJIfXVi
— Bloomberg (@business) September 17, 2018
CBD is becoming increasingly popular in the wellness market
Unlike another cannabinoid in cannabis, THC, CBD does not produce a high in users. It has become increasingly popular in the wellness sector, however, as it can relieve a number of ailments, including sleeplessness, nausea, chronic pain and anxiety. The US Food and Drug Administration (FDA) has also approved it to treat epilepsy.
Earlier on 17 September, BNN Bloomberg reported that Coca-Cola was in serious talks to collaborate with Aurora Cannabis, a licensed cannabis producer that is headquartered in Edmonton, Canada.
Both companies later rejected the report but Aurora Cannabis stocks rose 17.7% on the back of the news.
In a statement to CNBC, Aurora indicated that while it may not be working with Coca-Cola, it remained interest in producing an infused beverage. “We intend to enter that market,” it said.
“There is so much happening in this area right now and we think it has incredible potential. As a rule, we do not discuss business development initiatives until they are finalized, however we have a responsibility to our shareholders to give proper consideration to all relevant opportunities that are presented.”
Coca-Cola exploring cannabis drinks business https://t.co/i6jHgRc9m1
— Financial Times (@FT) September 17, 2018
Beverage companies moving into the cannabis industry
Coca-Cola would not be the first beverage giant to pursue what is expected to be a hugely lucrative emerging market.
Constellation Brands, the maker of Corona and Modelo beers, increased its stake in Canadian cannabis company Canopy Growth from 9.9% to 38% for US$4 billion in August this year.
That deal was based on a very optimistic appraisal of Canopy Growth’s worth and includes options for Constellation to acquire up to 50% of the company. Marijuana will become legal in Canada from October.
With beer sales down, Corona, Heineken and Molson Coors are getting into the marijuana business. https://t.co/51q16HZ9o6
— CNBC (@CNBC) September 10, 2018
Similarly, Molson Coors Brewing Company, which owns brands such as Miller, Blue Moon and Carling, announced it was forming a joint venture with cannabis producer Hydropothecary to produce non-alcoholic cannabis-infused beverages for the Canadian market. The company also expects to expand to new territories as marijuana becomes legalised in other countries.
Coca-Cola has become interested in diversification recently as its core business of soft drinks shows signs of decline. In August, it announced it was acquiring Costa Coffee in a deal worth more than US$5 billion.
It has also dipped its toe into the alcoholic beverage market, launching its first ever alcoholic drink for sale in Japan.