Coca-Cola May Make Cannabis-Infused Drinks

Soft drinks giant Coca-Cola is contemplating moving into the expanding market of cannabis-infused drinks.

Coke said through a prepared statement on Monday that it was watching closely the growth of CBD, which is the non-psychoactive component of marijuana, as one of the ingredients of what have become known as functional wellness drinks.

Coke’s statement said the space is making a quick evolution, but final decisions have yet to be made.

CBD, which will not produce highs for users, is used for medical purposes, which includes easing pain, nausea, and inflammation.

A report says that Coke was holding talks with Aurora Cannabis a company based in Canada that has also shown interest in cannabis-infused drinks. Neither Coke nor Aurora commented on any possible deal.

Constellation Brands, which makes Corona beer, Casa Noble tequila and Svedka vodka, announced in August it was investing another $4 billion in Canopy Growth a cannabis company in Canada.

Several cannabis companies in Canada including MedMen Enterprises and Cronos now trade on stock exchanges in the U.S., and some companies in the U.S. have purchased stakes.

Lagunitas a Heineken brewery craft beer already makes a drink that is infused with THC, the active ingredient in marijuana, which produces a high. That drink is available for purchase at California marijuana dispensaries.

Both CBD and cannabis are illegal under U.S. federal law, though several states legalized marijuana. However, the prohibition of CBD is not enforced strictly. Third party sellers offer products that are CBD-based on Amazon.

Coke is likely well-positioned to win market share if CBD as well as other products with marijuana are made legal, said one analyst.

The analyst said Coke was taking a long-term stance in its positioning and estimated that drinks that are cannabis-infused could one day have an annual market value of $50 billion in just the U.S. alone, which is close to half that of beer sales in the U.S. that in 2017 were $117 billion.

Both Coca-Cola and its biggest rival PepsiCo are attempting to expand their businesses to include more than just the traditional soft drinks as consumers shift from sugary beverages to healthier drinks.

Last week, Coca-Cola announced it had reached a deal to acquire Costa Coffee at $5 billion.

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