If you have been following the cannabis trend that is taking the world by storm, then you may have had thoughts about the business opportunities. All of us have smoked weed and thought about the next big business breakthrough and with cannabis already legal in Canada, this industry is bound to take off in the next couple of years.
Cannabis was a multi-million dollar industry long before it became legal. Growers in Canada and the United States have been at it for years, with British Colombia, California, and other places are notoriously famous for their growing operations. When it was illegal, growers were competing against each other for their piece of the market; but now that it’s becoming legal, it opens the doors to a whole new set of competitors. Companies are now able to invest in cannabis and Canada has become a hot seat for the creation of new companies and the expansion of existing ones.
These companies bring with them a lot of capital, connections, and assets, making it easy for them to establish themselves in this growing market. This can be a problem for the small-time entrepreneur but it does mean that the industry will experience growth like it’s never seen before. One of the biggest companies to come into the scene is Coca-Cola.
Coca-Cola in Canada
Cannabis is still illegal in the United States, meaning the American-based company can’t get involved in their home soil. But just because it isn’t legal yet, doesn’t mean they can’t go somewhere where it is. Coca-Cola Canada is huge division and the staging ground for their new move into the cannabis industry.
There is no point fighting the change and any good business will see the opportunity that is present. Coca-Cola is no different and with their highly skilled development team, they are able to see the potential of cannabis-infused drinks. At the moment the focus is with the non-psychoactive CBD, but once their foot is in the door what’s to stop them from taking it a step further to THC.
This comes at a time when Coca-Cola is not doing as great as it once was. They aren’t at risk of going bankrupt any time soon, but the demand for soft drinks is decreasing on a global level. Society’s interests are changing and this is one industry Coca-Cola wants to get involved in.
Talks have already started with Aurora Cannabis, a Canadian cannabis company that is the second largest cannabis producing company in the world in terms of market capitalization. The next biggest company is the Canopy Growth Corporation. Aurora Cannabis is a major player, producing over 500,000 kg of cannabis per annum, with operations in 18countries. This would be a major move for Coca-Cola as a partnership with them would give them almost unlimited access to CBD or THC.
Coca Cola’s Competition
It isn’t a moment too soon that Coca-Cola is getting involved, because they are already a few steps behind some other competitors. There are cannabis infused beverages already available and some larger beverage companies have already gotten involved. Constellation Brands Inc., the company that creates Corona beer and Svedka vodka, and Lagunitas Brewing Co., owned by Heineken, have both entered into the cannabis industry.
Constellation Brands have done so by securing a relationship with Canopy Growth Corporation, the biggest cannabis company in the world, by purchasing a minority share. This is exactly what Coca-Cola is now trying to do and instead of going with Canopy Growth they went for Aurora Cannabis. If both companies pursue product development with these growers it could mean big things for the cannabis beverage industry.
Lagunitas Brewing Co. is the furthest along as they already have a product on the shelves in California. Their THC-infused sparkling water focuses on the psychoactive ingredient. This is a slightly different approach to Coca-Cola, as they are allegedly starting with CBD first. It makes sense that a company like Coca-Cola would want to ease into the cannabis market with a non-psychoactive ingredient first.
No matter the company, Canada is where this is all taking place. As a schedule 1 drug, American companies are unable to get involved on the level that is necessary to get ahead of the competition. So companies that want to take advantage of the up-and-coming market are moving their negotiations to Canada. Many of these companies are using Canada as a sort of testing ground, where they can prepare for the floodgates to open should the USA and other countries legalize cannabis on a federal level.
But even if the USA does not legalize cannabis any time soon, these companies will have a field day in Canada, where the cannabis market has exploded. The demand is definitely there and with enough focus on the right product development, Coca-Cola could become one of the first major companies to take charge of the new cannabis industry.