Coca Cola Eyeing CBD Drink Market

A report from Bloomberg stated that beverage giant Coca-Cola (KO) was keeping its eyes on the CBD beverage market and it could be considering Aurora Cannabis (ACBFF) as its partner.

“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers said in an emailed statement to Bloomberg News. “The space is evolving quickly. No decisions have been made at this time.”

Cannabidiol or CBD is the part of the cannabis plant that provides wellness benefits but does not give the consumer a psychoactive response. Green Market Report had heard for many months that Coca Cola was actually stockpiling CBD in a very hush hush operation, that could not be confirmed.

Constellation Brands (STZ) kicked off the cannabis beverage battle when it billions investing in Canopy Growth Corp. (CGC). The investment came under fire from Moody’s, who called it a speculative bet. Even some Constellation shareholders had complained the board had gone rogue.

The Constellation move was followed by a joint venture between Molson Coors and Hydropothecary Corp. to develop a cannabis drink. Lagunitas, owned by Heineken has already launched a THC beer called Hi-Fi Hops.

The focus has mostly been on THC-infused drinks as a replacement for alcoholic beverages. The idea is that consumers would prefer the drinking experience to continue, but instead of getting buzzed by alcohol, they would feel the effects of cannabis.

Coca Cola recognizes that the CBD drink market could be even bigger. It would be the equivalent of Vitamin water. Soda sales have declined as wellness drinks have taken over. Coca Cola has already made efforts to diversify its beverage portfolio like adding Odwalla drinks, Smart Water, Honest Tea, Fairlife milk and of course Vitamin Water.

Cannabis beverages already exist in legalized states, but they have been a very small part of the cannabis consumer market. Typically, sales only command about 1% of the market according to Headset data.

CBD drinks are also already on the market from companies like CBD Living Water.  Still, there hasn’t been a mainstream producer willing to take the risk associated with a cannabis drink. If Coca-Cola does move forward with Aurora, it could spark a cannabis beverage battle.