With recreational cannabis becoming legal in Canada this month, and a number of US states appearing to move in a similar direction, the market for cannabis infused beverages and other edibles has been opening up.
Innovation and cannabis launches have primarily been coming from smaller companies;with a key question being how the big multinationals will act as the category emerges.
While Constellation Brands, Molson Coors and Heineken have started exploring the category, both Coca-Cola and PepsiCo have this month stated they have no plans to enter the sector at this stage.
US market: 'Federally, these things are still not legal'
Wine and spirits giant Constellation Brands has invested $4bn in Canadian cannabis company Canopy Growth to develop cannabis infused beverages; as well as investigate the wider cannabis space. Heineken’s Lagunitas, meanwhile, has already launched a cannabis infused sparkling water. And Molson Coors Canada has created a joint venture called Truss with Canadian cannabis producer The Hydropothecary Corporation (HEXO), to develop non-alcoholic, cannabis infused beverages in Canada.
Last month it was suggested that Coca-Cola was in talks with Aurora Cannabis, a Canadian marijuana producer, with the drinks giant reported to be ‘closely watching’ the growth of non-pyschoactive CBD in beverages.
But asked about the company’s plans in the cannabis category during this week’s earnings call with analysts, CEO James Quincey stated: “We don't have any plans at this stage to get into this space.”
His comments follow on from a statement made by Coca-Cola last month in response to speculation over its interest in the segment: “We have no interest in marijuana or cannabis. 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.”
PepsiCo, too, appears to have a similar stance on cannabis. Speaking in its Q3 earnings call earlier this month, Hugh F. Johnston, vice chairman, executive VP and CFO, said the company was watching the space carefully but had no current plans to enter it.
“I think it's fair to say we look at everything,” he told analysts. “But I think the difficulties in investing in that category, particularly in the US where federally these things are still not legal, are quite a considerable challenge.
“So we look at everything: but certainly no plans at this point to do anything.”