PepsiCo chief financial officer Hugh Johnston revealed that the drinks giant is mulling over the idea of cannabis-infused drinks in a CNBC interview this week. Johnson was discussing the FMCG giant’s plans for its beverage division when the question about the controversial beverage idea came up.
“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.
Cannabis is still illegal under federal law in the US despite nine states have legalised it including Washington DC, California and Nevada.
News that PepsiCo’s rival soft drinks company Coca-Cola is said to be eyeing cannabis for its drinks in the future has prompted further discussion in the industry. Coke is looking at how it can infuse cannabidiol, the non-psychoactive component in cannabis, into its beverages.
Some consumers have reacted on Twitter regarding the cannabis news.
— Joe Weisenthal (@TheStalwart) October 2, 2018
An analyst did ask. @pepsi CFO @hughjohnston said "it's fair to say we look at everything" but noted that there are "difficulties" in investing in cannabis since it's still not legal federally in US. $PEP https://t.co/il1sAq6oAr
— Paul R. La Monica (@LaMonicaBuzz) October 2, 2018
Beer maker Molson Coors has collaborated with Canadian company, The Hydropothecary Corporation (HEXO), on cannabis-infused non-alcoholic beverages. Another beverage giant Constellation Brands, the maker of Corona, announced a hefty $4 billion investment in Canada’s Canopy Growth in exchange for a 38 per cent stake in Canopy, according to AFP.
CNBC reported that the shares of cannabis stocks Tilray and Aurora, declined on Tuesday upon trader’s expecting the move of the drinks giant into the cannabis sector.
Canada is set to legalise cannabis on October 17 after both houses of the Parliament has voted to make the drug available for recreational use.
Inside FMCG has contacted PepsiCo for further comment.