PepsiCo has eyes on the booming cannabis market

October 3, 2018

On October 2, PepsiCo  announced better-than-expected third-quarter earnings that showed signs of growing consumer demand for its namesake cola, teas, Gatorade, and other beverages in North America

Now, following in the footsteps of competitor, Coca-Cola, Pepsi is reportedly taking a hard look at how the cannabis industry—and cannabidoil (CBD) products, in particular—can push those profits exponentially in the near future.

Coca-Cola last month said it is “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages,” after reports surfaced it may be eyeing the cannabis-infused drink market, CNBC reported.

Indeed, Hemp Business Journal says that companies that jump on the CBD bandwagon now will enjoy an uptick as the market for the legal cannabis derivative explodes—to an anticipated $1.8 billion by 2020.

“I think we’ll look at it critically, but I’m not prepared to share any plans that we may have in the space right now,” Chief Financial Officer Hugh Johnston told Jim Cramer and Sara Eisen on CNBC’s Squawk on the Street on October 2.

Cannabis, which still is illegal at the federal level in America, but is legal in some states and in Canada, has attracted increasing attention from food and beverage companies as either an opportunity for future growth—or conversely, a threat to their brands, CNBC reports.

In mid-August, Corona beer-maker Constellation   announced an additional $4 billion stake in Canadian cannabis company Canopy Growth, following up on a previous investment in October 2017.

The CBD is derived from the marijuana plant that some people believe provides therapeutic relief. It does not include THC, which is what gives cannabis-users a “high.”

Research contact: @LaurenSHirsch

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