Companies Mull Possibilities of Profit from Canadian Cannabis Market

[dropcap class=”kp-dropcap”]A[/dropcap]s recreational cannabis sales begin in Canada as of Oct. 17, many companies, including alcohol and beverage companies are researching the possibility of carrying cannabis products on store shelves and in their product line.  Companies that are not usually associated with cannabis, such as Walmart, are pondering possibilities and inking deals as the new market launches next week.

In the United States, the CBD market is a $1 billion industry and a possible pairing for companies focused on producing wellness products. “Health and wellness consumers are beginning to find value and use cases from CBD-based oil extracts, tinctures, topicals and capsules to improve everyday life,” Cowen & Co. analyst Vivien Azer wrote about the future of CBD.

Last month, the Canadian-based Shoppers Drug Mart received approval from Health Canada to dispense medical cannabis for patients, having applied in October 2016 for licensing. The company already has deals with several cannabis producers and has no plans of cultivating its own product.

The Canadian branch of Walmart Inc. has been researching the possibility of carrying cannabis products in its Canadian stores as well.  “As we would for any new industry, Walmart Canada has done some preliminary fact-finding on this issue, but we do not have plans to carry CBD products at this time,” spokeswoman Diane Medeiros said in an email. She also wrote that the company has no plans to dispense medical marijuana at its pharmacies “at this time.”

The Coca-Cola Company and PepsiCo rivalry has consumers watching and ready to invest in a CBD beverage. PepsiCo stocks dropped slightly after an announcement that the company had no plans to invest in cannabis at this time. However, Coca-Cola sources speaking anonymously stated that the beverage company was in talks with Aurora Cannabis Inc. to develop cannabis-infused beverages.  In response, Aurora spokesperson Heather MacGregor did not confirm, but said that the cannabis company does have interest in the infused beverage arena. “As a rule, we do not discuss business development initiatives until they are finalized, however we have a responsibility to our shareholders to give proper consideration to all relevant opportunities that are presented,” MacGregor said.

The Canadian arm of Molson Coors Brewing Co. announced a partnership with The Hydropothecary Corporation in August where the companies will produce non-alcoholic infused products for the Canadian market. “Canada is breaking new ground in the cannabis sector and, as one of the country’s leading beverage companies, Molson Coors Canada has a unique opportunity to participate in this exciting and rapidly expanding consumer segment,” said Frederic Landtmeters, president and CEO of Molson Coors Canada.