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Exactly one month from today, millions of Canadians will be able to buy weed legally, and industry leaders across North America are racing to grab a slice of this massive new market. To this end, many major alcohol firms, including Canadian brewery Molson-Coors and American distribution giant Constellation Brands, have already made massive investments in Canada's pot industry, with an eye on bringing a variety of cannabis-infused alcoholic beverages to market.
The excitement over infused beverages is not limited to booze, though. The Coca-Cola Co. is reportedly close to inking a deal with Aurora Cannabis, one of Canada's largest cannabis producers, to create a new range of CBD-infused beverages designed to help fight inflammation and chronic pain. “It’s going to be more of the ‘recovery drink’ category,” an anonymous source said to Bloomberg. Both companies have officially declined to discuss the details of the potential partnership, but the source said that the two firms are “pretty advanced down the path” of negotiations.
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Coca-Cola spokesperson Kent Landers told Bloomberg that although “no decisions have been made at this time,” his company has been “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world. The space is evolving quickly.” In a statement, Aurora said that they would not discuss any potential deal until it was finalized, but added that they have “expressed specific interest in the infused beverage space, and we intend to enter that market," according to Markets Insider. "There is so much happening in this area right now and we think it has incredible potential.”
The partnership is indeed likely to be a lucrative one, considering the exploding popularity of CBD. The market for this non-psychoactive cannabinoid is expected to exceed $2 billion by 2020, and luxury hotels, restaurants, and spas are rushing to offer CBD-infused products to their customers. Coca-Cola also has a special advantage in the cannabis sector, as around a third of pot consumers prefer Coke to any other leading soda brand, according to a recent survey.
Despite the high likelihood of success, Coca-Cola and other major consumer-packaged goods (CPG) companies are hedging their bets by partnering with existing cannabis companies rather than creating their own marijuana production facilities. “There’s a lot of interest from CPG and liquor and tobacco [companies] to look at cannabis as a new growth vector,” Martin Landry, managing director of equity research at GMP Securities LP, said to Bloomberg.
“If I’m a big CPG company, the reason I’d want to partner with a cannabis producer is to use them as a test market to develop products here in Canada and perfect them, so then I can enter the U.S. down the road when it’s more appropriate to do so.”