Coca-Cola made big waves last month when reports surfaced the company was exploring production of a possible CBD-infused drink in collaboration with Aurora Cannabis. Following the announcement, cannabis stocks soared across the board. Mind you, neither party confirmed the deal. The possibility of the deal was enough.
The opposite has happened to Pepsi, thanks to an interview from the company’s Chief Financial Officer, Hugh Johnston. In an interview with CNBC’s Jim Cramer, Johnston was pressed about Pepsi making similar advances into the cannabis industry like its major soft drink competitor.
“We will look at it very critically,” Johnston said about marijuana. “But I am not prepared to share any plans that we may have in the space right now.”
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Johnston emphasized that while he was aware of Canada’s upcoming legalization, cannabis remains federally illegal in the United States. Still, Pepsi would “turn over every stone to look for growth.”
Johnston expanded his views on a company earnings conference call when asked by Cowen analyst Vivien Azier about cannabis.
“I think the difficulties in investing in that category, particularly in the U.S., where federally these things are still not legal, are quite a considerable challenge,” he said. “So we look at everything, but certainly no plans at this point to do anything.”
Cannabis stocks fell everywhere after Johnston’s announcement, none more than Tilray, which dropped by 16 percent Tuesday. Pepsi’s stock dropped 1.8 percent as well following the news.
Investors wanted Pepsi to say yes to cannabis, but the company's CFO is saying no pic.twitter.com/pKTNaEevTH
— QuickTake by Bloomberg (@QuickTake) October 2, 2018