Aurora Cannabis Inc. helped to push cannabis stocks higher following reports that stated Coca-Cola Co. is eyeing the cannabis drinks market. This could see Coke becoming the latest beverage company to tap into budding demand for cannabis products as traditional sales slow.
Coca-Cola states that it’s watching the 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 Canadian marijuana producer Aurora Cannabis to develop the beverages, according to a report from BNN Bloomberg Television.
“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. No decisions have been made at this time.” Landers declined to comment on Aurora.
Aurora’s shares surged on the news, jumping as much as 23 percent to $8. Other stocks in the cannabis industry got a boost as well, with Tilray Inc. adding as much as 9.4 percent in response to Coca-Cola’s interest.
Coke’s possible jump into the marijuana sector comes as beverage makers are attempting to add cannabis as a trendy ingredient while their traditional businesses tailor back. Corona beer brewer Constellation Brands Inc. has already announced that it will spend $3.8 billion to boost its stake in Canopy Growth Corp., the Canadian marijuana producer with a value that exceeds C$13 billion ($10 billion).
Molson Coors Brewing Co. is also getting in on the action via a joint venture with Quebec’s Hexo’s Corp., formerly known as Hydropothecary Corp., to create cannabis drinks in Canada. Diageo PLC, the maker of Guinness beer, is said to be having discussions with at least three Canadian cannabis producers about a possible deal, BNN Bloomberg reported last month. Heineken NV’s Lagunitas craft-brewing label has launched a brand specializing in non-alcoholic drinks infused with THC, marijuana’s active ingredient.
The discussions with Aurora are focused on CBD-infused drinks to help with inflammation, pain, and cramping, according to the BNN Bloomberg report. CBD, or cannabidiol, is the chemical in the pot plant often used for medicinal purposes and 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.
Aurora is Canada’s third-largest pot company, with a market value of C$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 on Oct. 17. 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.