Coca-Cola Dipping Into the Cannabis Infused Drink Market
FILE–In this Aug. 8, 2018, file photo, bottles of Coca Cola sit on a shelf in a market in . [+] Pittsburgh. The Coca-Cola Company says that it’s “closely watching” the growth of the use of a non-psychoactive element of cannabis in wellness drinks. (AP Photo/Gene J. Puskar, file)
Long gone are the controversial days of Coca-Cola infusing cocaine into its popular product, now they’ve turned their attention to cannabis. The dominant soft drink maker may have the chance to make cannabidiol (CBD), the non-psychoactive chemical found in marijuana plants, infused drinks for the masses.
The Breakdown You Need to Know
Nine states and Washington, D.C. legalized recreational marijuana this year as of January, and Coca-Cola is hoping that the Farm Bill will spread the green love to all 50 states. If the Farm Bill passes, it will remove hemp as a controlled substance which CBD can be derived from, therefore making the plant legal under federal law.
With the legalization of hemp investment opportunities in the industry would become nearly boundless. Companies selling the product would get access to more financial development, that’s currently not an option because of its classification as a controlled substance. This would open up the floodgates for companies Coca-Cola would be able to work with.
Cannabis research firm Brightfield Group, recently raised its projections for the CBD industry , finding it could reach $22 billion in market size by 2022. Coke investors are probably very welcoming of this news as a strong revenue stream that will have a lot of upside. If the company is able to capture just 10% of the projected market size, it would bring in $2.2 billion in revenue by 2022.
This line of thinking follows their investments into other alternative drinks as the consumption of soda continues to decline. CultureBanx reported in an effort to get in on the natural sports drink wave, they became the second-largest investor in Kobe Bryant’s BodyArmor drink. The investment came with a significant windfall for the former basketball star, one of the company’s early investors, making his initial 10% investment worth $200 million in just five years.
Infused Beverage Mindfulness
Coca-Cola owns more than 500 brands around the world and reported annual revenue of $35.4 billion in 2017, down 15.5% from the same time last year. Weak sales and the ever changing consumer palate, has forced the company to find growth in other areas. They have been making investments in their international markets along with new beverage ideas, such as an alcoholic offering that’s only available in Japan.
BNN Bloomberg reported the company is in “ serious talks ” with Aurora Cannabis to develop CBD-infused beverages. Coca-Cola and Aurora would likely develop beverages that will ease inflammation, pain and cramping.
In regards to all the speculation around Coca-Cola’s plans to venture into this market they stated “We have no interest in marijuana or cannabis. 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. The space is evolving quickly. No decisions have been made at this time.”
Aurora is just one of several companies Coca-Cola has discussed developing a cannabis drink strategy with. Executives have held high-level talks with Leamington, and Aphria two months ago, according to the publication.
Long gone are the controversial days of Coca-Cola infusing cocaine into its popular product, now they’ve turned their attention to cannabis. If the company is able to capture just 10% of the projected market size, it would bring in $2.2 billion in revenue by 2022.
Coca-Cola ‘in talks’ over cannabis-infused drinks
17 September 2018
Coca-Cola is best known for its eponymous caffeine-based drink, but the firm now appears to be experimenting with a different drug: cannabis.
According to Canada’s BNN Bloomberg, the drinks giant is in talks with local producer Aurora Cannabis about developing marijuana-infused beverages.
These would not aim to intoxicate consumers but to relieve pain.
The firm declined to comment but said it was watching the cannabis drinks market closely.
“Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive cannabidiol as an ingredient in functional wellness beverages around the world,” Coca-Cola said in a statement.
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Cannabidiol, a constituent of cannabis, can help ease inflammation, pain and cramping, but has no psychoactive effect.
It comes as Canada prepares to follow certain US states in legalising cannabis for recreational use, after years of permitting it for medicinal purposes.
It has given rise to a large pot growing industry and some high-profile partnerships.
Earlier this year, beer giant Molson Coors Brewing said it would make cannabis-infused drinks with Hydropothecary, while Corona-beer maker Constellation Brands invested $4bn more into pot firm Canopy Growth.
A partnership between Coke and Aurora would mark the first entry of a major manufacturer of non-alcoholic drinks into the market.
Quoting unnamed sources, BNN Bloomberg said Coca-Cola was in “serious talks” with Aurora but no deal had been finalised.
“They’re pretty advanced down the path” of doing a deal, one source was quoted as saying.
“It’s going to be more of the ‘recovery drink’ category,” the source added.
Aurora, in a separate statement, said it would not discuss business development initiatives until they were finalised, but added: “Aurora has expressed specific interest in the infused beverage space, and we intend to enter that market.”
Coca-Cola’s shares rose marginally in early trade on Monday.
A report says the drinks giant is in discussions to develop pot-infused beverages with a cannabis firm.