Coca-Cola in talks with Aurora Cannabis
On September 17, BNN Bloomberg reported that Aurora Cannabis (ACB) (ACBFF) and Coca-Cola (KO) are in “serious talks” to develop cannabis-infused beverages. Coca-Cola joins alcoholic beverage makers Constellation Brands (STZ) and Molson Coors (TAP), which have already formed partnerships with major Canadian cannabis companies Canopy Growth (WEED) (CGC) and HEXO (HEXO), respectively.
How the stocks reacted
Following the announcement, Aurora Cannabis was trading almost 18.2% higher at 10.1 Canadian dollars per share, while Coca-Cola (KO) was up 51 basis points. Canopy Growth (CGC) (WEED), another cannabis stock (HMMJ), rose 2.9%, while Tilray (TLRY) was up 9.7%. The right side of the above chart shows companies that may take an interest in developing cannabis-infused drinks in the coming months. Investors may want to keep an eye on these companies.
What kind of beverage?
According to the BNN Bloomberg report, Coca-Cola is looking to develop CBD-based (cannabidiol) drinks. According to Health Canada, “CBD does not produce a high or intoxication” unlike THC (tetrahydrocannabinol), which is known for its psychoactive properties. Bloomberg’s report stated that Coca-Cola and Aurora Cannabis plan to focus on developing drinks to target users that want to ease pain, inflammation, and cramping. The drink may be categorized as a “recovery drink,” according to the report, which is interesting, as it may indicate that cannabis players may target the “over-the-counter cannabis” category in the coming years. Cannabis is already available for medical use with a prescription in Canada and several parts of the world including Germany and Australia.