Cannabis stocks shed some of their early gains Tuesday, after Coca-Cola Co.’s CEO said the drinks giant has no plans for the sector, disappointing hopes that global beverages companies were poised to bring their capital and marketing clout to the burgeoning industry.
Coca-Cola KO, +1.79% said last month that it was eyeing the cannabis sector, specifically the market for CBD-infused drinks, or those that contain non-psychoactive ingredients in cannabis that are widely thought to have health benefits.
“The space is evolving quickly. No decisions have been made at this time,” Coca-Cola said at the time.
The comment fueled speculation that Coca-Cola would follow Constellation Brands Inc. STZ, -2.32% which has invested $4 billion in Canada’s Canopy Growth Corp. CGC, +0.82% WEED, +2.53% There were reports that rival Diageo PLC DGE, +0.39% was also looking at targets. The market for CBD drinks is expected to grow to more than $2 billion in sales within two years, according to Science Daily.
Coca-Cola Chief Executive James Quincey was clear in his response to an analyst question on the company’s earnings call: “We don’t have any plans at this stage to get into the space. So that’s kind of where we are,” Quincey said, according to a FactSet transcript of the call.
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Tilray Inc. TLRY, -1.14% shares were down 2.5%, Aleafia Health Inc. ALEAF, -0.21% ALEF, -2.00% was down 2.5% and Aurora Cannabis Inc. ACB, +1.52% ACB, +4.29% was down 0.1%. 22nd Century Group Inc. XXII, -3.39% was down 3.4%.
Among the gainers of the session, Canada’s Aphria Inc. APH, +6.11% was up 5.4% after the company said it would start trading on the New York Stock Exchange on Nov. 2. The company, which currently trades on the Toronto Stock Exchange and the U.S. OTC market, will list under the ticker symbol “APHA.”
Chief Executive Vic Neufeld said the company is planning to expand beyond Canada, which legalized cannabis for adult recreational use on Oct. 17, into Latin America, the Caribbean and Europe.
Cronos Group Inc. CRON, +3.68% was up 2.5% and Canopy Growth Corp. was up 2.5%.
Cannabis Sativa CBDS, -6.19% had shed its early gains to trade down 9%.
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