Shares of Aurora Cannabis Inc. were up as much as 17% today after a report the marijuana producer was in talks with the Coca-Cola Company to develop pot-infused drinks.
The Edmonton-based company’s stock briefly rose above the $10 mark in early trading after the report by BNN Bloomberg, citing sources.
Aurora Cannabis shares were trading at $9.90, up 16 per cent on heavy volume, by early afternoon.
Sources told BNN Bloomberg that the world’s largest beverage company is interested in developing drinks that are infused with cannabidiol, the non-psychoactive element in cannabis also known as CBD.
While CBD does not have the same psychoactive effect that THC does, it has been touted by some as having therapeutic effects, such as pain relief.
A spokeswoman for Aurora Cannabis said the licensed producer does not discuss business development initiatives until they are finalized, but noted that it had a responsibility to shareholders to give proper consideration to all relevant opportunities that are presented.
“Aurora has expressed specific interest in the infused beverage space, and we intend to enter that market. 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.
Coca-Cola did not respond to questions about Aurora or any other Canadian cannabis companies.
“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 company said in a statement on its website on Monday. “The space is evolving quickly. No decisions have been made at this time.”
The news report comes after other major beverage companies have made forays into the cannabis space via deals with Canadian marijuana companies. Last month, the beer, wine and spirits producer Constellation Brands signed a deal to invest $5 billion into Canopy Growth Corp., increasing its stake in the cannabis producer to 38%. The investment follows a deal last year in which Constellation acquired a nearly 10% stake in Canopy and the two companies agreed to collaborate on the development of cannabis-based drinks.
Also last month, Molson Coors Canada entered into a joint venture with HEXO Corp. to develop non-alcoholic cannabis-infused products.
Though Canada is gearing up to legalize marijuana for recreational use on Oct. 17, beverages infused with the plant’s active ingredients won’t be legal until sometime in 2019. Still, many cannabis companies have been boosting their capabilities to produce value-added cannabis-based products, which are posed to have bigger profit margins than dried cannabis.