Coca-Cola says it’s monitoring the nascent industry and is interested in CBD – the non-psychoactive ingredient in marijuana – for beverages as soda consumption slows.

The soft drinks maker is in talks with Canadian marijuana producer Aurora Cannabis to develop the drinks, according to Bloomberg.

“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesperson Kent Landers said. “The space is evolving quickly. No decisions have been made at this time.”

Landers declined to comment on Aurora.

Coke’s possible foray into the marijuana sector comes as beverage makers are trying to add cannabis as a trendy ingredient while their traditional businesses slow. Last month, Corona beer brewer Constellation Brands announced it would spend $3.8 billion (R57bn) to increase its stake in Canopy Growth, the Canadian marijuana producer with a value that exceeds C$13 billion (R150bn).

Cannabis drinks

Molson Coors Brewing is starting a joint venture with Quebec’s Hydropothecary to develop cannabis drinks in Canada. Diageo, maker of Guinness beer, is holding discussions with at least three Canadian cannabis producers about a possible deal, Bloomberg reported last month. Heineken’s Lagunitas craft-brewing label has launched a brand specialising in non-alcoholic drinks infused with THC, marijuana’s active ingredient.

Coca-Cola has already been diversifying as consumption of soda continues to decline. The company, with its iconic brands ranging from Coke and Sprite to Powerade, announced it will acquire the Costa Coffee chain for $5.1bn in August, and has expanded into other products including juice, tea and mineral water over the past decade.

The discussions with Aurora are focused on CBD-infused drinks to ease inflammation, pain and cramping, according to Bloomberg. CBD, or cannabidiol, is the chemical in the pot plant often used for medicinal purposes, and doesn’t produce the high that comes from THC, or tetrahydrocannabinol. There are no guarantees of any deal between Aurora and Coca-Cola, according to the report.

Aurora comment

Heather MacGregor, a spokeswoman for Aurora, said in an emailed statement that the cannabis producer has expressed specific interest in the infused-beverage space, and intends to enter that market, Bloomberg’s David George-Cosh reported.

While marijuana remains illegal at the national level in the US, there is growing acceptance of the use of CBD derived from marijuana to treat illnesses ranging from chronic pain to anxiety and epilepsy. The first-ever medical treatment derived from a marijuana plant will hit the US market soon, after regulators in June gave an epilepsy treatment by GW Pharmaceuticals the green light.

Aurora is Canada’s third-largest pot company, with a market value of C$8.7bn. The Edmonton, Alberta-based company has soared along with other pot stocks in Canada as the country gears up to become the first Group of Seven nation to legalise cannabis on October 17. The BI Canada Cannabis Competitive Peers Index has more than doubled in the past 12 months, though has dropped 24 percent in 2018 on concern that the stocks are overvalued.

– BLOOMBERG

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