As more Americans turn away from sugary soft drinks, beverage companies like Coca-cola have started to diversify into other beverages like coffee, tea, water, and health drinks. And now it looks like they are venturing even farther into the alternate drink frontier with the potential for cannabis-infused beverages.
There are rumors of a Coca-cola Aurora Cannabis Inc. partnership after BNN Bloomberg reported that the two companies are in talks.
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There are two main kinds of cannabis beverages. The first is the kind with a "buzz" that is being targeted to the same market as adult beverages. New partnerships in this area include Molson Coors Brewing and The Hydropothecary Corporation, along with Constellation Brands (maker of Corona beer) and marijuana producer Canopy Growth Corporation. These drinks are recreational; think pot-infused beer.
The other kind of cannabis beverage falls more on the side of medical marijuana, though with the compounds that cause the buzzy high associated with pot removed. The product would be considered a recovery drink focused on the relief of cramping, inflammation, and pain.
Kent Landers, a Coca-Cola spokesman, emailed a statement to BNN Bloomberg. While he wouldn't comment specifically on the potential of a joint venture with Aurora, he noted that "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. Space is evolving quickly. No decisions have been made at this time."
This potential partnership is a big deal on several levels. By virtue of the fact that Coke is such an iconic American company, it lends credibility to the market of pot-infused drinks. In fact, it helps legitimize the marijuana industry itself. A connection between pot and beer companies is clear. However, if a major manufacturer of non-alcoholic beverages like Coca-cola is willing to put significant money and effort into developing cannabis-related products for market, then marijuana is far more likely to gain wider acceptance.
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It is a bit of a risk, at least here in the United States. Right now, marijuana is illegal at a federal level, though several states have legalized it for recreational use and a few others have okayed the use of medicinal marijuana. In Canada however, pot-infused drinks are pretty much a sure bet. Cannabis is set to go legal nationwide across Canada on Oct. 17 and big companies are already moving to take advantage of a new cannabis market.
Heather MacGregor, a spokeswoman with Aurora, also emailed a statement to BNN Bloomberg saying that the company is planning to produce infused beverages, although they haven't finalized plans. She said, "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."
One interesting note: Because marijuana is still illegal at a federal level here in the U.S., companies interested in getting into the cannabis-infused market are looking to Canadian marijuana producers for partnerships. If these products do well (and they almost certainly will, given the sales numbers for legal pot in states like Colorado), it's likely that American companies will push harder for legalization nationwide here in the U.S. so as not to miss out on a potential revenue source. States are also likely to want in on the legal production in order to benefit from the tax revenue.
Even though a partnership between Coke and Aurora to produce a cannabis-infused drink isn't final, the news of Coca-cola Aurora cannabis talks has been well received in the business community. Shares in Aurora were up about 16 percent on the Toronto Stock Exchange and Coca-Cola's stock rose 0.15 percent on the New York Stock Exchange.
