Marijuana stocks and a cannabis-related ETF jumped Monday on reports that Aurora Cannabis (ACB-CA) was in talks with Coca-Cola (NYSE: KO) to develop a weed-infused drink.
The ETFMG Alternative Harvest ETF (NYSEArca: MJ), first U.S.-listed ETF to target the cannabis and marijuana industry, gained 2.8% Monday.
Coca-cola and Aurora Cannabis could develop marijuana-infused beverages that are mainly health-focused to ease inflammation, pain and cramping, Reuters reports.
“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,” Coca-Cola said in a statement, referring to cannabidiol, a constituent of cannabis. “No decisions have been made at this time.”
“Aurora has expressed specific interest in the infused beverage space, and we intend to enter that market,” Aurora said in a separate statement.
Nothing has been finalized between the two companies.
Aurora Shares Surged on Speculation
Aurora shares surged 17.6% on the speculation. Other marijuana stocks also rode the wave, with Tilray Inc (NasdaqGS: TLRY) rising 8.4%, on bets of further partnership opportunities between the up-and-coming cannabis industry and traditional consumer companies.
MJ’s underlying portfolio includes 8.6% Tilray and 7.3% Aurora Cannabis.
A partnership between Coke and Aurora would mark the first entry of a major non-alcoholic beverage manufacturer into the market of marijuana-related products.
Alcoholic beverage producers have already eyed the cannabis market as a next step. For instance, Corona beer brewer Constellation Brands said it would spend $3.8 billion to increase its stake in Canopy Growth. Molson Coors Brewing began a joint venture with Hexo’s Corp, formerly known as Hydropothecary Corp. Diageo, the maker of Guinness beer, is in talks with three Canadian cannabis producers.
More attention is being focused onto the cannabis industry as U.S. states move to legalize marijuana for recreational use and Canada, where Aurora is based, plans to fully legalize marijuana for recreational use next month, mid-October.
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