Pubdate: Mon, 17 Sep 2018
Source: Philadelphia Inquirer, The (PA)
Copyright: 2018 Philadelphia Newspapers Inc
Author: Jen Skerritt and Craig Giammona


Employees inspect cannabis plants at the CannTrust Holdings Inc.
Niagara Perpetual Harvest facility in Pelham, Ontario, Canada.

Aurora Cannabis Inc. led pot stocks higher after Coca-Cola Co. said
it's eyeing the cannabis drinks market, becoming the latest beverage
company to tap into surging demand for marijuana products as
traditional sales slow.

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. The Atlanta-based
soft drinks maker is in talks with Canadian marijuana producer Aurora
Cannabis to develop the beverages, according to a report from BNN
Bloomberg Television.

"We are closely watching the growth of non-psychoactive CBD as an
ingredient in functional wellness beverages around the world,"
Coca-Cola spokesman Kent Landers said in an emailed statement to
Bloomberg News. "The space is evolving quickly. No decisions have been
made at this time." Landers declined to comment on Aurora.

Aurora's shares surged on the news, jumping as much as 23 percent
Monday in New York to $8. 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.

Coke's possible foray into the marijuana sector comes as beverage
makers are trying to add cannabis as a trendy ingredient while their
traditional businesses slow. Last month, Corona beer brewer
Constellation Brands Inc. announced it will spend $3.8 billion to
increase its stake in Canopy Growth Corp., the Canadian marijuana
producer with a value that exceeds $10 billion.

Molson Coors Brewing Co. is starting a joint venture with Quebec's
Hexo's Corp., formerly known as Hydropothecary Corp., to develop
cannabis drinks in Canada. Diageo PLC, maker of Guinness beer, is
holding discussions with at least three Canadian cannabis producers
about a possible deal, BNN Bloomberg reported last month. Heineken
NV's Lagunitas craft-brewing label has launched a brand specializing
in nonalcoholic drinks infused with THC, marijuana's active ingredient.

Coca-Cola has already been diversifying as consumption of soda
continues to decline. The company, with its iconic brands ranging from
Coke and Sprite to Powerade, announced it will acquire the Costa
Coffee chain for $5.1 billion in August and has expanded into other
products including juice, tea, and mineral water over the past decade.

The discussions with Aurora are focused on CBD-infused drinks to ease
inflammation, pain, and cramping, according to the BNN Bloomberg
report. CBD, or cannabidiol, is the chemical in the pot plant often
used for medicinal purposes, and doesn't produce the high that comes
from THC, or tetrahydrocannabinol. There are no guarantees of any deal
between Aurora and Coca-Cola, according to the report.

Heather MacGregor, a spokeswoman for 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, BNN
Bloomberg's David George-Cosh reported.

While marijuana remains illegal at the national level in the U.S.,
there is growing acceptance of the use of CBD derived from marijuana
to treat illnesses ranging from chronic pain to anxiety and epilepsy.
The first-ever medical treatment derived from a marijuana plant will
hit the U.S. market soon, after regulators in June gave an epilepsy
treatment by GW Pharmaceuticals Plc the green light.

Aurora is Canada's third-largest pot company, with a market value of
$6.67 billion. The Edmonton, Alberta-based company has soared along
with other pot stocks in Canada as the country gears up to become the
first Group of Seven nation to legalize cannabis on Oct. 17. The BI
Canada Cannabis Competitive Peers Index has more than doubled in the
past 12 months, though has dropped 24 percent in 2018 on concern that
the stocks are overvalued.