News outlets reported Tuesday that Canadian branches of the discount chain store Walmart are exploring their options for selling cannabis products, though there are no immediate plans to do anything just yet.
According to reports in both CNBC and Bloomberg, Walmart’s Canadian unit is interested in CBD-infused products, the THC alternative that doesn’t cause a high that has caught the attention of mainstream industry over the past few months. The popular discount store is the first major retailer to show interest in the cannabis industry, with previous exploratory moves coming from beverage companies like Coca-Cola and other vice industries.
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“As we would for any new industry, Walmart Canada has done some preliminary fact-finding on this issue, but we do not have plans to carry CBD products at this time,” spokeswoman Diane Medeiros said in an email, according to both Blomberg and CNBC.
Bloomberg also clarified that Walmart has no plans to dispense medical marijuana in any of its pharmacies “at this time,” according to an additional statement from Medeiros.
Outside interest in the cannabis industry has stimulated investor excitement over the past few months, ever since beverage company Constellation Brands announced a $4 billion investment into Canada’s number one Licensed Producer Canopy Growth Corporation (TSX:WEED) (NASDAQ:CGC).
Mainstream industry takes a FOMO attitude towards cannabis
In the months following Constellation Brands investments, the rumor mill surrounding the cannabis industry has swirled, with Coca-Cola and PepsiCo being at the forefront of most lists to enter the market. Last month word slipped that Coca-Cola had some preliminary talks with Aurora Cannabis Inc. (TSX:ACB), although the popular soda maker was quick to stifle those rumors at the time.
“We have no interest in marijuana or cannabis,” read a statement from the company. “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. The space is evolving quickly. No decisions have been made at this time.”
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However, companies are quickly finding out that shunning the industry may not be in their best interest. Last week PepsiCo denied any interest in the cannabis industry, despite rumors, which led to a sharp decline in stock prices.
"I think we'll look at it critically, but I'm not prepared to share any plans that we may have in the [cannabis] space right now," Chief Financial Officer for PepsiCo Hugh Johnston told CNBC's Squawk on the Street recently.
As for CBD itself, companies both in and out of the cannabis industry are starting to see the potential of the extract. Last week Khiron Life Sciences (TSX-V:KHRN) announced a new line of CBD-infused cosmeceutical products that the company plans to sell under the brand name Kuida. The move forced Canaccord Genuity to raise their target price on the Colombian cannabis giant up CAD$0.40 per share.
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“Health and wellness consumers are beginning to find value and use cases from CBD-based oil extracts, tinctures, topicals and capsules to improve everyday life,” Cowen & Co. analyst Vivien Azer wrote in a research note Tuesday, according to Bloomberg. “We expect to see CBD used as a functional ingredient in non-alcoholic beverages.”
*Header Image By Daniel Case