Aurora Cannabis shares rise on reported talks with Coca-Cola

Ivan Schwartz
September 18, 2018

BNN Bloomberg is reporting that the Coca-Cola Company (NYSE:KO) is in "serious talks" with Canadian Licensed Producer Aurora Cannabis to develop cannabis-infused drinks, according to sources close to the discussions.

It's believed Coca-Cola is interested in developing refreshments that are infused with cannabidiol, commonly referred to as CBD, the non-psychoactive chemical found in marijuana plants.

"The space is evolving quickly", Coke said.

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

The company reportedly is in talks with Canada's Aurora Cannabis to develop the drinks.

A partnership between Coke and Aurora would mark the first entry of a major manufacturer of non-alcoholic beverages into the market for cannabis-related products.

Coca-Cola is considering a move into the growing market for cannabis-infused drinks. Just last week, Coke announced a deal to buy Costa Coffee for $5 billion. Coca-Cola shares were marginally higher in a US market struggling against expectations of another round of Chinese trade tariffs.

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But unlike other recent deals between alcohol companies and cannabis producers who make beverages to give consumers a "buzz", Coca-Cola and Aurora are reportedly looking to make drinks that would ease inflammations, pain, and cramping.

It seems like all the cool kids are doing it, but many were surprised to see that the world's largest beverage company is considering dipping its toes into the cannabis market.

Aurora was up more than 15% in early trading Monday following the report.

Other stocks in the cannabis industry got a boost, with Tilray Inc. adding as much as 9.4 percent in response to Coca-Cola's interest.

While marijuana remains illegal at the national level in the US, there is growing acceptance of the use of CBD derived from marijuana to treat illnesses ranging from chronic pain to anxiety and epilepsy. The company is the world's largest beverage maker, responsible for 1.9 billion of the 60 billion beverage servings every day.

A source told BNN Bloomberg Television that the two companies are "pretty advanced down the path" of forging a deal.

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