Coca-Cola CEO Pours Cold Water on Cannabis Talk … For Now

Pot stocks reportedly declined on the news.

ATLANTA – Cannabis stocks reportedly saw a decline today in the wake of comments by Coca-Cola chief executive James Quincey indicating the company will not be entering the cannabis market anytime soon. According to MarketWatch.com, stocks tumbled on the news due to “disappointing hopes that global beverages companies were poised to bring their capital and marketing clout to the burgeoning industry.”

It was only last month the soft drink behemoth tickled the underbelly of the nascent cannabis industry with news it was interested in the CBD-infused beverage market.

Advertisementorangephotonics.com

“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,” said the company in mid-September. “The space is evolving quickly. No decisions have been made at this time.”

A month later, after Pepsi’s CFO confirmed the company has no immediate plans to join the cannabis bandwagon, only to walk that comment back the same day after PepsiCo stock dropped 1.4 percent, a decision by Coca-Cola has apparently been made.

“We don’t have any plans at this stage to get into the space,” Quincy said today during the company’s earnings call, in answer to an analyst’s question. “So that’s kind of where we are.”

As equivocal as that response may sound, market analyst Jason Wilson told MarketWatch the non-move by Coke is the right move. “Unlike the beer, wine and spirits sector, cannabis or CBD-infused beverages are not an imminent threat to non-alcoholic beverages sales, so it makes sense that a large, multinational, non-alcoholic beverage manufacturer like Coca-Cola would to take a wait-and-see approach,” said Wilson, president of Budding Equity Asset Management and a partner in the ETFMG Alternative Harvest ETF, in an email exchange.

However, he also told MarketWatch Quincy’s comment should not be interpreted to mean Coca-Cola will never enter the space. Unlike other beverage companies, it can wait.

“In contrast,” wrote Wilson, “the sales of alcoholic beverage producers and distributors are under more immediate threat of cannibalization, which is why we have seen companies like Constellation Brands and Molson Coors TAP enter the cannabis space.”

That may also explain the recent announcement by Constellation Brands CEO Rob Sands that he will be stepping down from that position next March in order to oversee the company’s $4 billion investment in Canopy Growth.

Advertisementccell.com