Coca-Cola 'in talks' to create cannabis-infused health drink

Coca-Cola is reportedly in talks with a Canadian company to create a cannabis-infused health drink.

The soft drinks giant said it is "closely watching" the expanding use of a cannabis element in drinks.

It is said to be in talks with Aurora Cannabis to create a drink infused with cannabidiol, a naturally occurring non-psychoactive compound derived from the cannabis plant.

Cannabidiol, or CBD, does not produce the high commonly associated with marijuana. It is believed by many to have anti-inflammation and pain-relieving properties and numerous CBD-infused products have emerged recently.

Shares in Aurora Cannabis closed up nearly 17% on the Toronto Stock Exchange after the reports emerged.

Neither Coke nor Aurora would comment on the reports, but both acknowledged their interest in that segment of the cannabis market.

Aurora spokeswoman Heather MacGregor said her company "has expressed specific interest in the infused-beverage space and we intend to enter that market".

A Coke spokesman said the beverage giant has made no such decision.

"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 spokesman Kent Landers said.

Coke's interest is another indication of the growing acceptance of cannabis by established companies and of the importance of Canada to the development of those businesses.

Marijuana becomes legal across Canada on October 17. Cannabis companies from the US - where marijuana remains illegal at the federal level - have flocked to Canada to raise funds and establish businesses.

American companies interested in making a play in the cannabis space can try things out in Canada without risking doing something illegal at home.

Constellation Brands, a giant spirits company that counts Corona beer among its labels, has bought a multibillion-dollar minority stake in Canopy Growth, a Canadian medical marijuana producer.

Hemp and marijuana are both cannabis plants, and both contain CBD, which can be extracted as an oil that can be added to everything from dog food to hand lotion to drinks.