After the news about Coca Cola getting into the weed industry broke out, Aura Cannabis Inc. stocks surged. If this is true, Coca Cola Cannabis would be the latest company in the beverage industry to tap into the thriving marijuana industry.
Coca Cola is said to be monitoring the cannabis industry and is showing interest in producing CBD-infused drinks. For those who don’t know, CBD is basically the non-psychoactive ingredient in marijuana that has been shown to be effective in treating pain. Since it’s non-psychoactive, it will not get people high. According to some reports, Coca Cola is in talks with Aurora Cannabis, a Canada-based producer of marijuana. The two companies are said to be discussing the possibility of creating drinks infused with cannabis.
Legalization of Marijuana in the US
Several states have now legalized the use of cannabis, both for recreation and medical use. As a result, experts believe that investment opportunities in the cannabis industry will soon become almost boundless. Companies that sell cannabis-infused products will now be given access to financial development, something that was not possible before since cannabis was classified by law as a controlled substance. This will no doubt open up the floodgates of opportunities for beverage companies like Coca Cola.
Brightfield Group, a Cannabis research firm, raised its projections for the CBD industry and believes that the market could reach $22 billion by the year 2022. Investors of Coca Cola found this news very welcoming believing that a strong revenue stream will soon be enjoyed by the company. If the Coca Cola Cannabis industry can capture even 10% of the projected revenue, this equates to a whopping $2.2 billion in revenue, which is quite promising for all investors. Such a line of thinking will do well for the company because the consumption of soda all over the world is continuing to decline.
Coca Cola Co. owns hundreds of different brands all over the world and has reported yearly revenue of $35.4 billion in 2017. This was a decrease of 15.5% compared to their previous year’s revenue. Weak revenue and the changing palate of customers are some of the reasons why the company has searched for alternatives outside the beverage market.
Bloomberg has reported that Coca Cola is having serious discussions with Aurora Cannabis for their plans to develop beverages that are infused with cannabis. If this will push through, Aurora and Coca Cola may be able to come up with beverages that are capable of treating cramping, pain, and inflammation.
No Interest in Cannabis
When Coca Cola was asked about all these speculations, they stated that they have no plans to venture into the cannabis or marijuana industry. However, they admitted that they are closely monitoring the growth of the CBD industry. CBD is the non-psychoactive component of cannabis that has been found to have several therapeutic benefits. They believe that the industry of CBD is evolving quickly. But they said that they have not yet made any decisions regarding the Coca Cola Cannabis plans.