Coca-Cola is eyeing the cannabis market

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Coca-Cola says it's monitoring the nascent industry and is interested in drinks infused with CBD - the non-psychoactive ingredient in marijuana that treats pain but doesn't get you high.

"Coca Cola confirmed it is "closely watching" CBD as an ingredient in wellness beverages", Bloomberg reported on Monday. The space is evolving quickly.

Coca-Cola insisted "no decisions have been made at this time" and said it would not comment on further speculation.

Last month, Corona beer brewer Constellation Brands Inc. announced it would spend $3.8 billion to increase its stake in Canopy Growth Corp., the Canadian marijuana producer with a value that exceeds C$13 billion ($10 billion). The company is looking to branch into the cannabis beverage market, according to a report.

Coca-Cola's shares rose marginally in early trade on Monday. Cannabidiol is a chemical derived from marijuana that can help with pain, but doesn't contain the psychoactive components present in tetrahydrocannabinol (THC).

Coca-Cola is best known for its eponymous caffeine-based drink, but the firm now appears to be experimenting with a different drug: cannabis. "There is so much happening in this area right now and we think it has incredible potential", said Aurora's director of communications Heather MacGregor in an emailed statement. It is the non-psychoactive chemical component of marijuana used for medicinal objective which doesn't produce the high that usually comes from tetrahydrocannabinol (THC).

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Canada legalised cannabis for recreational use in June this year.

Aurora, in a separate statement, said it would not discuss business development initiatives until they are finalized, but added: "Aurora has expressed specific interest in the infused beverage space, and we intend to enter that market".

The source added, "It's going to be more of the "recovery drink" category".

The move, however, comes as other big beverage makers announced similar partnerships.

Landry said that large consumer-packaged goods (CPG) companies such as Coca-Cola or Switzerland-based Nestle S.A. would likely favour a joint-venture type of deal with a cannabis producer rather than making a large equity investment that could be at risk if pot company valuations decline in the coming years.

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