Coca-Cola Explores The Possibility of Cannabis-Infused “Wellness Drinks”
Oct 08, 2018 | By Alexander Beadle
With a net market worth of roughly $188 billion, and portfolio of over 500 owned brands, The Coca-Cola Company has a well-deserved reputation for savvy business partnerships within the beverage industry; and they now may well be standing at the frontier of another. Following a recent diversification in beverage offerings via the purchasing of the Costa Coffee chain, current speculation now links Coca-Cola with the Canadian cannabis producer Aurora Cannabis Inc. in a joint venture of creating a drink infused with cannabidiol (CBD), a major component of cannabis.
The rumored Coca-Cola deal
Multiple anonymous sources have told BNN Bloomberg that Coca-Cola and Aurora Cannabis Inc. are in “serious talks” regarding the development of a CBD product and that the two companies are “pretty advanced down the path” of striking a deal on the matter.
The sources indicate that Coca-Cola/Aurora would focus on CBD’s properties as a strong anti-inflammatory and a moderately effective pain reliever to create a product that would be marketed as a health and wellness recovery drink for relieving inflammation, pain and muscle cramping.
An official statement was published by Coca-Cola in response to the BNN Bloomberg reporting, explaining that Coca-Cola “are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world” but that “no decisions have been made at this time.” The statement did not mention any involvement with Aurora Cannabis Inc.
A similar official statement was also published by Aurora Cannabis’ CEO, Terry Booth, which explained that Aurora’s company policy “is not to comment on speculative media reports” but that Aurora “does confirm that it engages in exploratory discussions with industry participants from time to time.”
Interestingly, Heather MacGregor, a spokeswoman with Aurora, said in an email statement to BNN Bloomberg that Aurora does intend to enter the cannabis beverage space in the future, but again reiterated that “we do not discuss business development initiatives until they are finalized”.
Links between the beverage and cannabis industries
These sorts of business relationships are not a new phenomenon for beverage companies; there are already a number of business deals that have been agreed between cannabis suppliers and companies involved in the beer industry.
Last month, Constellation Brands, the company behind the famous Corona and Modelo beer brands, announced an investment deal with Canopy Growth, Canada’s top cannabis producer. The deal gives Canopy Growth access to around $4 billion USD in exchange for a 38% stake in the Canadian company. Both companies hope that this injection of funds will help Canopy Growth expand from being the top Canadian cannabis producer, to becoming a market leader in every country that has a legal cannabis market.
In addition to investment deals, some brewers are partnering with cannabis producers in order to produce novel drinks. Lagunitas Brewing Company, a Heineken brand, have partnered with CannaCraft’s AbsoluteXtracts to create a sparkling water that is infused with tetrahydrocannabinol (THC), the main psychoactive component of cannabis. The drink, named “Hi-Fi Hops” comes in two different doses of THC and is available from selected cannabis dispensaries in California.
A second brewing company, Molson Coors, are also planning on launching a similar beverage within the next year in partnership with the Quebec-based cannabis producer Hydropothecary to bring THC-infused drinks to dispensaries in Canada.
The CBD beverage market
Some start-up companies have already begun to infuse their beverages with CBD to appeal to the “health and wellness” market.
In addition to the anti-inflammatory and pain relieving properties already mentioned, CBD is also reported to be effective at tackling anxiety and nausea: many users report feeling calm and relaxed after ingesting CBD. Because of this, the CBD-infused drinks that are already available commercially are often marketed as being useful for stress relief and improving overall mental wellness.
Some beverage companies also choose to infuse CBD in their drinks in order to directly complement the product itself. For example, Kickback Cold Brew Coffee infuses CBD into its cold brew coffee in order to combat some of the negative effects associated with caffeine consumption, such as heightened anxiety. The company claims this leaves the customer with “a functional chill” as they enjoy caffeine stimulation with none of the negative effects.
CBD-infused beverages can also be a good way for people who wish to take CBD recreationally to experience these effects, but who feel uncomfortable purchasing pure CBD oil from cannabis dispensaries. The CBD used in these beverages is usually derived from hemp plants, therefore it is possible for the drinks to be legally sold in places other than dispensaries.
While Coca-Cola and Aurora do not confirm the speculations, it can also be said that they have not been fully denied either. With cannabis becoming legal nationwide in Canada later this month, and the U.S. cannabis market projected to continue growing in value, Coca-Cola or a similar large beverage company could stand to benefit hugely from entering the market while it is still in its younger stages. Similarly, the cannabis company that would partner with any large beverage company that joins the market will also benefit from the decades of experience in marketing and consumer research that an established drinks brand would bring with it.
There are many questions surrounding this suspected business deal with Coca-Cola and Aurora Cannabis, not the least of which is whether these discussions are in fact happening. However, with the cannabis industry only expected to grow and the cannabis drinks market becoming more firmly established within that industry, it seems like the eventual involvement of global brands in the industry is a certainty. The real questions about this rumored deal should perhaps be more of the nature “if not now, when?” and “if not Coca-Cola, whom?”.