Walmart’s Canadian unit announced on Tuesday that the company is exploring and considering selling cannabis-infused products, although it has no immediate plans to incorporate the product into business yet. Cannabidiol or CBD, is the non-psychoactive chemical found in marijuana, meaning it does not cause intoxication.
After the news, Walmart’s shares increased 2.1 percent, climbing to $96.67. CNBC reports Walmart is the first retail giant to show an interest in Canada’s marijuana industry, while other large United States companies (who are mainly in the alcohol and beverage industries) are beginning to seriously consider joining the market for cannabis-based products.
Coca-Cola mentioned last month that it is keeping a close eye on marijuana drinks in the market, while looking for a possible entry, saying it’s “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world.” Corona beer maker Constellation Brands, also invested more than $4 billion towards cannabis producer Canopy Growth. However, when PepsiCo Inc. noted it will not be investing in cannabis, its shares decreased slightly.
“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,” Walmart spokeswoman Diane Medeiros told Reuters.
Interest in CBD is booming lately as Canada prepares to legalize recreational marijuana next week, joining several other countries who have begun legalizing the plant as well. “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. “We expect to see CBD used as a functional ingredient in non-alcoholic beverages.”