Don’t expect cannabis-infused drinks to join PepsiCo’s (PEP) stable of beverage brands just yet.
“We don’t have any plans to enter that category [cannabis] at this time. I still think it’s very nascent and think we will sort of let that evolve before we declare any specific plans in that category,” PepsiCo Vice Chairman and CFO Hugh Johnston said on Yahoo Finance’s The First Trade. “More broadly at PepsiCo we don’t leave any stones unturned in terms of looking for growth first and foremost, in the CPG space. But cannabis is something we will look at carefully before entering.”
Coca-Cola (KO) executives have echoed that wait-and-see approach in recent interviews with Yahoo Finance as well. It makes sense—careful evaluation is needed for the two beverage legends not only from a reputational standpoint, but also legal.
Nonetheless, the cannabis beverage market appears ripe for explosive growth and at some point each soda giant will have to play or risk missing out on a lucrative financial opportunity. The cannabis beverage market is seen growing at a 15.6% annual growth rate from 2019 to 2025, reaching about $4.5 billion, according to Zion Market Research.
And beer maker Anheuser-Busch InBev (BUD) appears to have a first mover advantage in the space via a partnership with cannabis producer Tilray (TLRY) that was inked in 2018. Tilray CEO Brendan Kennedy told Yahoo Finance in September new regulatory changes that go into effect in Canada later this year that will allow it to finally release new cannabis-infused beverages backed by the Budweiser maker.
Count this journalist in on a taste test.