Aurora Cannabis stocks rise as Coca-Cola eyes CBD infused drinks

18 Sep 2018 --- Coca-Cola is eyeing CBD-infused drink options as consumer interest in marijuana products grows and regulatory changes make this segment increasingly viable for diverse new product development. The beverage company is reportedly working with Aurora Cannabis, a Canadian medical marijuana producer and distributor. Following Bloomberg’s report on the companies' collaboration, Aurora’s shares jumped by 23 percent on Monday in New York to US$8.

The news comes as scientific awareness about cannabis is on the increase and Canada is set to become the second country in the world to legalize cannabis for recreational use next month (after Uruguay). In the US, state-based legalization campaigns are spreading, with the number of states allowing the recreational or medical use of cannabis on the rise. There is also an emerging interest in cannabidiol (CBD), the non-psychoactive ingredient in marijuana thought to be responsible for many of cannabis’ therapeutic effects, which include pain relief.

In a statement on its website, Coca-Cola notes that “along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world. The space is evolving quickly. No decisions have been made at this time.” 

Coca-Cola is by no means the first beverage company eyeing the cannabis industry for inspiration over the past year. In August, for example, Heineken’s Lagunitas brand launched Hi-Fi Hops, a brew made with marijuana instead of alcohol.

Labeled as “hoppy sparkling water,” Hi-Fi Hops is currently only available in a select number of dispensaries in California, where marijuana is legal. 

Supplier response
Cannabis had already been tipped by nutrition and nutraceutical industry experts as an area for growth in North America, with people across different populations showing more curiosity for the ingredient as it gains increasing regulatory acceptance.

Innova Market Insights data show that of the global food & beverages and supplement product launches featuring CBD in 2018 so far, the US accounts for 76 percent of launches. 

In a recent interview with NutritionInsight, George Pontiakos, CEO of botanical supplier BI Nutraceuticals explains that he sees the market as having four areas of demarcation: “older guys who have been using the cannabis flower for ages, young people coming into the market experimenting, medical use of the flowersuch as for cancer treatments and the edibles, which will be the biggest market.”

Regarding the medical use of marijuana, Pontiakos highlights some key patterns: “We see millennial parents coming in, where recreational and medical use is allowed, and micro-dosing their children with cannabis edibles to get them off Ritalin and Adderall. We think this trend will continue. 

Last year, Neptune divested its krill oil business, subsequently renaming itself Neptune Wellness Solutions and announcing a participation in the creation of the Sherbrooke-based Green Valley Consortium, a strategic partnership of industry and academic stakeholders aimed to facilitate production and research and development of cannabis and related initiatives in the region.

As part of its strategic business development plan, Neptune's Cannabis Business is exploring joint venture licensing associations to bring together best-in-class processes and products to the Canadian market, estimated to represent between US$6 billion and US$8 billion in sales by 2021 and potentially more globally.

Speaking at the time with NutritionInsight, Neptune CEO Jim Hamilton said: “As this industry becomes embraced by the mainstream consumers, they are going be interested in dose-specific delivery systems, purity and convenient delivery systems.” Hamilton sees great potential for the cannabis business. “When you look at the cannabis business, I think a lot of people may think that there’s this culture that goes with it, but the more people engage with it, the more they look at the diversity of the products that come in the field such as CBD and the medical benefits it brings. I think we’re going to see a whole new category being created and I think it will become mainstream,” he notes.

By Lucy Gunn & Laxmi Haigh