Daily Archives: Sep 16, 2018

FILE PHOTO: The logo of Dow Jones Industrial Average stock market index-listed company Coca-Cola (KO) is seen in Los Angeles, California, U.S. April 4, 2016. REUTERS/Lucy Nicholson/File Photo

Reuters) – Coca Cola Co (KO.N) said on Monday it was looking closely at the growing marijuana-infused drinks market, responding to a media report that the world’s largest beverage maker was in talks with Canada’s Aurora Cannabis Inc (ACB.TO).

The potential product tie-up, reported by Canadian financial channel BNN Bloomberg, could help Coke’s efforts to overcome sluggish demand for its sugar-heavy sodas by diversifying into coffee and health-focused drinks.

Big corporate names have inched into the marijuana industry since Canada approved recreational use, seeing the country as a production base and testing ground until U.S. Federal Law changes.

“While there are opportunities in certain states in the USA for Coke to develop and sell a product it would put their banking relationships at jeopardy,” said Bruce Campbell, a portfolio manager at Stonecastle Investment Management who has invested in marijuana producers.

“Entry into a legalized Canadian market allows them to develop and build a brand while not breaking any laws.”

Both Coke and Aurora, in separate statements, said they were interested in cannabidiol infused beverages but could not comment on any market speculation.

Coke and Aurora would likely develop beverages that will ease inflammation, pain and cramping, the BNN report said here&_gucid=&_gup=twitter&_gsc=gQCuZEQ, citing sources familiar with the matter.

The move would make Coke the first major manufacturer of non-alcoholic beverages to step into the market for cannabis-related products, following announcements by Corona maker Constellation Brands (STZ.N) and Molson Coors Brewing Co (TAP.N).

The world’s largest spirits maker Diageo (DGE.L) is also reportedly in talks with at least three Canadian cannabis producers as it considers a possible investment. bit.ly/2PBJbL0

Sales in U.S. legal markets should nearly triple to $16 billion by 2020 from $5.4 billion in 2015, according to market research firm Euromonitor International, and Constellation says cannabis globally could be worth $200 billion in 15 years.

HEALTHY

Hard on the heels of a $5.1-billion deal to buy Costa Coffee last month, analysts said a move into marijuana-infused drinks fit with Coke’s moves toward a healthier product portfolio. Cannabidiol or CBD is one of hundreds of molecules found in marijuana plants, and contains less than 0.1 percent of tetrahydrocannabinol (THC), the psychoactive component that makes people high. It does not cause intoxication.

“Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coke said in its statement on Monday.

Aurora’s shares rose 14 percent while U.S-listed shares of fellow Canadian producers Canopy Growth Corp (CGC.N) and Tilray Inc (TLRY.O) gained respectively 3 and 7 percent. Coca-Cola shares were marginally higher in a U.S. market struggling against expectations of another round of Chinese trade tariffs.

Vivien Azer, an analyst with brokerage Cowen, said she would not be surprised to see Pepsi PEP.N seeking a similar tie-up.

“We continue to expect to see more deals between Canadian cannabis companies and the larger players in the global alcohol market who have yet to gain exposure to the category,” she said.

Reporting by Uday Sampath and John Benny in Bengaluru, Martinne Geller in London; editing by Patrick Graham

SEOUL (Reuters) – South Korea’s President Moon Jae-in is set to cross the heavily militarized border on Tuesday for his third summit with North Korean leader Kim Jong Un, seeking to cement a breakthrough in faltering nuclear talks between Pyongyang and Washington.

The inter-Korean summit will be a litmus test for another meeting Kim has recently proposed to U.S. President Donald Trump, giving clues to whether Kim is serious about denuclearization, a commitment he made at their first encounter in June.

Trump has asked Moon to be “chief negotiator” between himself and Kim, according to Moon’s aides, after Trump canceled a trip to Pyongyang by his secretary of state last month.

“I’d like to have frank dialogue with Chairman Kim on how to find a point of contact between U.S. demands for denuclearization and North Korea’s demands for ending hostile relations and security guarantees,” Moon told a meeting with senior secretaries on Monday.

Moon, himself the offspring of a family displaced by the 1950-53 Korean War, will fly into the North’s capital of Pyongyang, landing at 10 a.m. (0300 GMT), his chief of staff Im Jong-seok told a news briefing on Monday. He is expected to be greeted by Kim before an official welcoming ceremony.

The two leaders will sit down for formal talks after lunch, which will be followed by a musical performance and welcome dinner.

Accompanying corporate executives, including Samsung Electronics (005930.KS) Vice Chairman Jay Y. Lee and the chiefs of SK Group and LG Group, will meet with North Korean Deputy Prime Minister Ri Ryong Nam in charge of economic affairs, Im said.

On Wednesday, Moon and Kim are expected to unveil a joint statement, and a separate military pact designed to defuse tensions and prevent armed clashes, Im said.

Moon will return home early Thursday.

‘EVERYTHING IN BLANK’

Moon is hoping to help jumpstart nuclear negotiations between Pyongyang and Washington, by engineering a proposal that combines a concrete framework for the North’s denuclearization and a joint declaration ending the 1950-53 Korean War, Seoul officials said.

The war ended with an armistice, not a peace treaty, leaving U.S.-led U.N. forces including South Korea technically still at war with the North.

But U.S. officials remain “unenthusiastic” about declaring an end to the war without any substantial action toward denuclearization from the North, Seoul officials said.

South Korea is pinning high hopes on Kim’s remarks to Moon’s special envoys earlier this month that he wants to achieve denuclearization within Trump’s first term in office ending in early 2021, the first time line he has given.

Agreeing on a timetable is a core task for Moon, as it would induce U.S. action, said Lee Jung-chul, a professor at Soongsil University in Seoul.

“Given U.S. scepticism that South Korea may have oversold Kim’s willingness to denuclearise, how President Moon delivers his sincerity toward denuclearization to Trump would be a key factor for the fate of their second summit,” Lee told a forum on Monday in Seoul.

Reporting by Hyonhee Shin and Joyce Lee; Editing by Lincoln Feast

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