A few weeks ago, there were rumors about Coca-Cola potentially entering the CBD market with a new, CBD infused beverage. Last month, a report from Bloomberg suggested that there were “serious talks” between Aurora Cannabis, a major Canadian cannabis company, and Coca-Cola. According to some unknown sources, the two companies were in the final stages of negotiating a CBD infused beverages deal. However, Coca-Cola Publicly refused to answer questions about this issue but mentioned that it was closely monitoring the CBD space. Aurora cannabis also declined to comment on the point about the rumored talks.
But the stock price of Aurora still grew 23 percent the day the rumors went public. The stories eventually proved that they didn’t have enough staying power. Meanwhile, investors started thinking about why Coca-Cola wouldn’t push for deals in the multi-billion-dollar legal cannabis industry? However, today, the CEO of Coca-Cola, James Quincey addressed the rumors by saying that they were false.
The CEO of Coca-Cola James Quincey recently spoke with investors over the phone and fielded a question about their plans about partnering with Aurora. Quincey said that’s a “simple one, we don’t have any plans at this stage.”
However, based on the reaction from the stock market, Quincey’s response probably acknowledged what most people were suspecting: there’s no agreement in the progress. Aurora Cannabis (ACB) currently trades at least 3.4 percent on the NYSE. The Coca-Cola Co (KO) also trades about 2.5 percent. Meaning, investors were not foreseeing a cannabis-infused beverage deal.
Nonetheless, we are not sure if Coca-Cola isn’t planning on partnering with companies about the potential of a beverage deal at some point, this is because it’s a tremendous investment opportunity. Analysts have predicted that the marijuana industry will grow to $2.1 billion by 2020. It has also been projected that this billion-dollar industry will be led by the sales of infused foods, beverages, cosmetics, topicals and other medicinal and hemp creams. The Soda industry is facing a lot of downward pressure in the U.S. market. A past study on obesity states that fewer young people are consuming sugary drinks.
Coca-Cola sells soda and other “health and wellness” beverages and tea. Meanwhile, cannabis companies are producing an excess of CBD-infused drinks, which are sold to consumers who want the benefits of CBD. When we consider both measures, it’s almost unbelievable that the Coca-Cola company doesn’t want to partner with the cannabis industry. Nevertheless, a representative of Coca-Cola responded to the rumors by saying that the company is eyeing CBD wellness beverages.
The executives of Coca-Cola are not allowed to publicly comment on details relating to the company’s products and deals that are not certain. That’s probably what might have happened in this situation. Both companies might have just failed to agree. Maybe investors in Aurora cannabis will pursue Coca-Cola to enter the legal CBD market in time to come. But now, people have been waiting to see a large company like Coca-Cola in the cannabis space.