Coca-Cola is taking a close look at the cannabis drinks market, which uses the non-psychoactive chemical in marijuana to make wellness drinks.
“The space is evolving quickly,” it said in a statement, adding that, “no decisions have been made at this time,” according to the Financial Times.
The company has allegedly met with Canada’s Aurora Cannabis to develop beverages, with one source saying these talks are “preliminary,” and that Coca-Cola was also speaking to other companies. Aurora shares got a big boost on Monday (Sept. 17) after the report, rising by about 14 percent.
This news is the latest sign that Coca-Cola wants to move beyond its signature products. Last month, the company acquired Costa, a coffee chain, for $5.1 billion. As part of the deal, Coca-Cola will take over about 2,400 locations in the United Kingdom, with the remaining 1,400 in international locations. This deal wasn’t Coke’s first dabbling in coffee beans, either, as it owns a coffee business in Japan, via Georgia Coffee.
Bonnie Herzog, drinks analyst at Wells Fargo, said that drinks containing cannabidiol could become big business — and not just for Coke.
“Coca-Cola is not the first beverage company to express interest in the rapidly growing cannabis-infused beverage space,” she said in a note. But the move could “broaden the reach of cannabis-infused beverages into functional wellness categories, enabling Coca-Cola to potentially one day ‘own’ the non-recreational cannabis-infused beverage category.”
“It’s probably not worth getting in a big debate right now about whether it’s cannibalistic or complementary,” said Constellation CEO Rob Sands. “There’s just not enough information to really say how that’s going to affect beverage alcohol generally moving forward. What we do know is it’s going to be a big market worldwide.”