Coke Could Make a Move Into Cannabis-Infused Drinks

Coca-Cola is considering a move into the growing market for cannabis-infused drinks.

Posted: Sep 17, 2018 11:09 AM
Updated: Sep 17, 2018 11:15 AM

(CNN Money) -- Coca-Cola is considering a move into the growing market for cannabis-infused drinks.

Coke said in a statement Monday that it is "closely watching" the growth of CBD, a non-psychoactive component in marijuana, as an ingredient in what it called functional wellness beverages.

"The space is evolving quickly," Coke said. "No decisions have been made at this time."

CBD, which does not produce a high for the user, has been used for medical purposes, including easing inflammation, pain and nausea.

Coke's interest was first reported by Bloomberg, which said the company was in talks with Aurora Cannabis, a Canadian cannabis company. Aurora has also expressed interest in cannabis drinks. Neither would comment on a possible deal.

"There is so much happening in this area right now and we think it has incredible potential," said Aurora spokesperson Heather MacGregor. "Stories like this are further validation of the massive global potential of the cannabis industry."

Constellation Brands, the maker of Corona beer, Svedka vodka and Casa Noble tequila, announced last month that it is investing an additional $4 billion in the Canadian cannabis company Canopy Growth.

A number of Canadian cannabis companies, including Cronos and MedMen Enterprises, now trade on US stock exchanges, and some American companies have taken stakes.

And Lagunitas, a craft beer label of brewing giant Heineken, already has a drink infused with THC, marijuana's active ingredient, which does produce a high. It can be purchased at marijuana dispensaries in California.

Both cannabis and CBD are still illegal in the United States under federal law, even though a number of states have legalized marijuana. But the prohibition against CBD is not strictly enforced. There are third-party sellers offering CBD-based products on Amazon, for example.

Still, it's unlikely that a major company like Coca-Cola would offer a product infused with CBD in the United States until the federal law changes, said Kris Krane, president of 4Front, a firm that advises companies on the legalities of marijuana and an expert on cannabis law. He said he would expect that Coke would develop the product first for sale in Canada, readying it for the United States once it's legal.

"I can't imagine they're doing it just for the 35 million people in Canada, they clearly have an eye on the US market," said Krane.

Coke could be well positioned to capture market share should CBD and other marijuana products become legal, said Bonnie Herzog, analyst with Wells Fargo. She said in a note to clients Monday that Coke is positioning itself for the long-term. She estimates that cannabis-infused drinks could become a $50 billion annual market in the United States -- nearly half the size of the $117 billion market for US beer sales.

Both Coke and rival Pepsico have been trying to expand their businesses beyond traditional soft drinks as people drink less soda because of health concerns. Just last week, Coke announced a deal to buy Costa Coffee for $5 billion.

Canada is in the process of legalizing recreational use of marijuana. The drug is still illegal under US federal law, although some states have decriminalized it.

In June, the US Food and Drug Administration approved the epilepsy treatment Epidiolex, the first cannabis-based drug allowed in the United States. It includes CBD as well.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 117215

Reported Deaths: 4305
CountyConfirmedDeaths
Los Angeles572192448
Riverside8155342
San Diego7554269
Orange6574150
San Bernardino5501208
Alameda351597
Santa Clara2819143
San Francisco258743
Kern237639
San Mateo218884
Tulare200489
Fresno188236
Imperial179829
Santa Barbara166912
Contra Costa150637
Sacramento143958
Ventura116434
Kings11375
San Joaquin98235
Stanislaus75029
Monterey57110
Sonoma5664
Solano54622
Marin50115
Merced3017
San Luis Obispo2781
Placer2289
Santa Cruz2172
Yolo21324
Madera1143
Napa1133
Humboldt1023
El Dorado960
San Benito882
Butte511
Sutter462
Del Norte460
Nevada421
Shasta394
Mono371
Mendocino300
Yuba301
Lake260
Inyo201
Glenn170
Mariposa161
Calaveras150
Amador100
Siskiyou80
Colusa70
Lassen50
Tehama51
Plumas40
Tuolumne40
Alpine20
Sierra10
Trinity10
Unassigned00
Chico
Few Clouds
88° wxIcon
Hi: 101° Lo: 69°
Feels Like: 88°
Oroville
Clear
89° wxIcon
Hi: 102° Lo: 69°
Feels Like: 89°
Paradise
Few Clouds
88° wxIcon
Hi: 94° Lo: 68°
Feels Like: 88°
Chester
Clear
76° wxIcon
Hi: 84° Lo: 54°
Feels Like: 76°
Red Bluff
Clear
90° wxIcon
Hi: 101° Lo: 68°
Feels Like: 90°
Willows
Few Clouds
88° wxIcon
Hi: 104° Lo: 65°
Feels Like: 88°
The Heat Advisory will stay in place through Thursday evening. Cooler temperatures and the potential for showers and thunderstorms are ahead for your weekend.
KHSL Severe
KHSL Radar
KHSL Temperatures

Community Events