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Coca-Cola in Talks with Aurora to Produce Cannabis Drinks

Rachelle Gordon

September 20th, 2018

Uncategorized

Coca-Cola (NYSE:KO) is now looking to get into the cannabis industry, according to a recent report from BNN Bloomberg Television. According to anonymous sources, they are in talks with Canadian cannabis producer Aurora (OTCMKTS:ACBFF), to produce drinks infused with cannabidiol or CBD, a cannabis compound that grants pain relief and treats inflammation. This is in contrast with tetrahydrocannabinol or THC, a more well-known cannabis compound which is traditionally associated with the ‘high’ feeling one experiences after consuming cannabis.

Aurora’s stock price jumped to $8 on Monday, as well as other Canada cannabis stocks like Tilray (NASDAQ:TLRY) which rose 9.4 percent in response to Coca-Cola’s expression of interest. Beverages are the new hot topic in the realm of cannabis: Coca-Cola’s interest comes after Constellation Brands Inc. (NYSE:STZ), known for brewing Corona beer increased their investment in cannabis giant Canopy Growth Corp. to 3.8 billion, as well as options for warrants which could see the beverage giant own 51% of Canopy.

Within Canada, popular brewer Molson Coors Brewing Co. (NYSE:TAP) is embarking on a joint venture with Hexo Corp. (TSX:HEXO) (formerly known as Hydropothecary Corp.) to develop cannabis-infused beverages. There are still more beverage suitors waiting in the wings, alcohol giant Diageo PLC (NYSE:DEO) is holding discussions with at least 3 Canadian cannabis producers, and the craft brewing label of Lagunitas owned by Heineken NV (OTCMKTS:HEINY)  has launched a brand to specialize in non-alcoholic drinks infused with THC.  

Coke’s interest in the emerging cannabis sector aligns with other attempts to diversify in the face of declining soda sales, such as acquiring the Costa Coffee chain for $5.1 billion in August. Past efforts to move beyond soda sales include development of products such as juice, tea, and mineral water. CBD-infused beverages would allow Coke to expand into the lucrative health and wellness market, valued at 50.2 billion in 2017.

Discussions between Aurora and Coke are around CBD-infused products that would ease inflammation, pain, and cramping, according to the Bloomberg report. While cannabis is still illegal federally in the US, CBD focused cannabis products such as the ‘Charlotte’s Web’ strain have enjoyed wider acceptance than the more THC heavy strains, being legalized at the state level in jurisdictions such as Missouri and Mississippi in which cannabis otherwise remains illegal.

In terms of overall size, Aurora is Canada’s third-largest cannabis company, with a market value of $8.7 billion. Based in Edmonton, Alberta, a region best known for the oil and gas industry, Aurora’s stock has steadily risen along with other cannabis stocks as Canada approaches being the first G7 country to legalize cannabis on October 17th.

Aurora announced on Tuesday that while it does engage in exploratory talks with other industries from time to time, it does not have any deal to announce with Coca-Cola, and was making the announcement in response to a request from Canadian industry regulators. Commercially available infused products such as edibles and beverages will not be legalized in Canada until at least October 2019, taking pressure off both cannabis producers and would-be beverage and food industry partners to enter into any agreements hastily.

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This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Rachelle Gordon

Rachelle Gordon is a Minneapolis-based writer. Find her online at www.rachellegordon.net.

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