Coca Cola (KO US) in potential partnership with Cannabis Producer Aurora (ACB CN) for Beverage. Positive signal for whole Cannabis industry.
Coca Cola (KO US) is in talks with Aurora (ACB CN) to develop Cannabis infused beverages according BNN reports;
The sources said that Coca-Cola, the world’s largest beverage company, is interested in developing beverages that are infused with cannabidiol, commonly referred to as CBD, the non-psychoactive chemical found in marijuana plants.
Coca Cola (KO US) is aiming to develop beverages that are mostly used to ease and relieve inflammation, pain and cramps. Spokesperson for the two companies said;
Kent Landers, a spokesman from Coca-Cola, declined to comment about Aurora. However, he added in an emailed statement to BNN Bloomberg 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.”
Heather MacGregor, a spokeswoman with Aurora, said in an emailed statement that the cannabis producer has expressed specific interest in the infused beverage space, and intends to enter that market.
“As a rule, we do not discuss business development initiatives until they are finalized, however we have a responsibility to our shareholders to give proper consideration to all relevant opportunities that are presented,” MacGregor said.
Coca Cola (KO US) interest of entering the Cannabis market is a clear indication that established beverage and package goods companies are serious about entering the Cannabis market which is growing at rapid pace and is still in its infancy. Other major package goods companies such as Nestle (NESN VX) could also look into potential partnership or JVs with various Cannabis companies as legalization on broad basis becomes more and more likely.
Aurora (ACB CN) is rallying over 14% on this news. We recommend you to look at previous article we wrote here on Askbrokers about m&a in the Cannabis space and what companies to keep an eye for. This space is very active and will probably be so for a while ahead.
Summary: With Coca Cola (KO US) looking enter Cannabis industry. Keep an eye on stocks (list here) in sector for potential other deals and movements.