This week another beverage giant, Coca-Cola, has shown interest in possibly partnering with Aurora Cannabis in order to develop various weed-infused beverages. While nothing has been verified by either company, they have both made statements confirming that they are thinking about pursuing this business opportunity. Even though no solid agreements were made, this didn’t stop Aurora’s stock prices from soaring today. It saw an increase of 12% when the news of this partnership first broke. Both companies have hinted that they will be producing beverages that are more focused on approving health then getting stoned. CBD seems to be the main focus of Coca-Cola, at least for the time being. They mentioned that the non-psychoactive compound is already being used in beverages across the world for health benefits and that they are monitoring this closely. It is likely that they are focusing on this instead of THC infused drinks because recreational marijuana is not yet legal in Canada or the U.S. There will also be a period of time after it is legalized next month where stores will not yet be operating. So it makes sense to first focus heavily on the already existing medical marijuana industry.
If this partnership were to happen, it would be the first time a major non-alcoholic drink producer entered into the cannabis market. This is shortly after the major $4 billion investment Constellation Brands made in Canopy Growth, Canada’s largest medical marijuana producer. A lot of investments and partnerships are being considered as we come closer and closer to recreational marijuana in Canada. Alcohol producer Molson-Coors had already announced earlier this year that they plan to produce cannabis-infused drinks with Hydropothecary. I would be willing to bet there will be more partnerships made by companies that have no existing relationship with cannabis. As long as a corporation has the existing infrastructure to easily produce a cannabis-related product or service, the possibility exists. Coke would have to invest little to nothing into their existing bottling and distribution centers. They would just need to source CBD or other cannabinoids and simply add it into the existing production process.
Cannabis infused drinks, if priced competitively, are extremely popular among cannabis consumers and patients. It is a great way to consume cannabis without the harms of smoking or eating unhealthy infused sweets. Most popular edibles that are produced have lots of fat and sugar. The target market for these new types of drinks would be the more health-conscious consumer. That is as long as Coca-Cola doesn’t decide to produce marijuana-infused drinks that are as bad for you as drinking coke. I think it would be a much smarter move to create a drink with much less sugar and caffeine. After all, they are planning on producing a beverage aimed at improving health. If they are successful at accomplishing this, they may even be able to reduce the negative stigma associated with their popular brand name.
Both companies have made it clear that there is absolutely zero guarantee that this merger will happen despite the great opportunity. Having an enormous corporation like Coca-Cola on Aurora’s team would put it in a better position to compete with Canopy Growth. They also probably will be developing marijuana-infused beverages with the knowledge and expertise Constellation Brands brings to the table. Both Coca-Cola and Aurora saw a rise in their stock value without any solid plans being announced. Imagine what type of increase they would see if a merger is confirmed, or if Aurora was able to expand to the United States. There is great opportunity ahead for Canada’s biggest medical marijuana producers.