Coca-Cola is the latest major corporation to make a move into the cannabis industry. Expect more in the coming years
Coca-Cola is the latest major corporation to make a move into the cannabis industry. Expect more in the coming years.
Coca-Cola has its eye on the cannabis market. BNN Bloomberg reported this week that the American soft drink giant is in talks with Canadian company Aurora Cannabis to produce drinks enhanced with cannabidiol, or CBD — a chemical in marijuana leaves that doesn’t create a high but shows promise for therapeutic and medicinal applications, including pain and stress relief. While declining to confirm the specifics, a Coke spokesman acknowledged the company was broadly interested in the booming cannabis space: “We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world.”
A partnership with Aurora, which has announced its own interest in infused beverages, would represent a “groundbreaking move that would signal a significant foray into the marijuana sector by one of the world’s most iconic consumer brands,” according to BNN Bloomberg.
Coca-Cola is responding to two incentives. One is the declining consumption of soda, which has led the iconic Georgia-based company to diversify into juice, coffee and tea. The other is the green wave it sees coming over the horizon, as cannabis gains greater respectability and — just as important — becomes legal in more and more places.
Coca-Cola’s move is just the latest sign that the big players are starting to feel more comfortable investing in cannabis. For most of the life of this nascent industry, large corporations have sat on the sidelines because of cannabis’ murky legal status. While cannabis in some form is legal in two-thirds of the states, at the federal level it’s still considered a Schedule 1 drug, the same as heroin.
That disconnect has meant that banks basically can’t work with cannabis companies unless they’re willing to file millions of suspicious activity reports and without the banks on board, public companies have stayed away.