Coca-Cola May Make Marijuana-Infused Drinks After Partnering With Cannabis Company: Report

After making a name for itself as one of the most iconic beverages in the market, the Coca-Cola Co. is looking to become recognized in the cannabis industry too, according to a BNN Bloomberg report which cited multiple anonymous sources.

The worldwide recognized soda brand was reportedly in “serious talks” with Aurora Cannabis Inc. to develop a marijuana-infused range of drinks.

According to one source with direct knowledge of the ongoing discussions between the two companies, “they’re pretty advanced down the path” of finalizing a deal.

Kent Landers, a spokesman from Coca-Cola, however, did not accept or deny that the company was trying to negotiate a deal with Aurora, although he did drop a pretty big hint.

He told BNN Bloomberg “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.”

Cannabidiol, or CBD, was the non-psychoactive chemical found in marijuana plants.

Although not many details about the kind of drink the collaboration will come up with are immediately known, it is bound to be different from the ones produced by alcohol makers who are in professional tie-ups with different cannabis companies.

According to a source who talked to BNN Bloomberg, alcohol companies mainly focused on giving their consumers a “buzz” when they consumed the new drink – almost like drinking marijuana instead of smoking it in a way, without the bitter aftertaste.

The kind of beverages that Coca-Cola is aiming for, however, will contain more medical benefits instead of being just for recreational use. The new range of drinks will aim to ease inflammation, pain, and cramping – benefits that medical marijuana boasts of.

“It’s going to be more of the ‘recovery drink’ category,” the source added.

But why was Coca-Cola venturing out of its comfort zone and diving into an unexplored territory?

The answer lies in its gradually falling annual revenue. The 132-year old company that owns more than 500 brands around the world, reported annual revenue of $35.4 billion in 2017, down 15.5 percent from 2016.

On the other hand, CBD market is estimated to grow to $2.1 billion by 2020, from $202 million in 2015, according to a recent report in the Hemp Business Journal.

With a lack of scope for expanding its range any further in traditional soft drinks, Coca-Cola has had to look for alternative beverage concepts such as alcoholic drinks, which it began selling in Japan. The cannabis sector is one such alternative.

“There’s a lot of interest from [consumer-packaged goods], and liquor and tobacco [companies] to look at cannabis as a new growth sector,” said Martin Landry, managing director of equity research at GMP Securities LP, in an interview with BNN Bloomberg.

“What’s happening is that the cannabis industry is still in its infancy and there’s not a lot of partners to dance with,” he added.

Coca Cola closed at $45.99 on Friday, up 0.35 percent.