Wal-Mart’s Canadian unit said last month that it is exploring the possibility of selling cannabis-based products, but has no immediate plans to get into the business.
Walmart is the first major retailer to show an interest in being part of Canada’s burgeoning marijuana industry, as other big U.S. companies, mainly in the alcohol and beverage industries, begin to seriously consider entering the market for cannabis-infused products.
Last month Coca-Cola said it was closely watching the marijuana drinks market for a possible entry, while Corona beer maker Constellation Brands has invested more than $4 billion in cannabis producer Canopy Growth.
“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.
Cannabidiol or CBD is the non-psychoactive chemical found in marijuana and does not cause intoxication.
The big-box retailer’s Canadian division told Bloomberg it has carried out some “preliminary fact-finding” on potentially carrying CBD (or cannabidiol) infused products, but has no plans to do so yet. Walmart’s stock was up 2% following the reports.
CBD is a non-psychoactive component of marijuana that’s linked to a range of health benefits but can’t get you high.
Canada is set to legalize marijuana federally on October 17. In the US, the CBD market is estimated to be a $1 billion business, and some analysts believe the market could explode to $22 billion across a range of categories, including beverages, snacks, and beauty products, in the next four years.
Coca-Cola is reportedly eyeing a deal with Aurora Cannabis to produce beverages infused with CBD for the Canadian market. Constellation Brands — the beermaker behind Corona and Modelo — recently paid $4 billion for a 38% stake in the Canadian cultivator Canopy Growth.
On top of that, Lagunitas, Heineken’s popular California-based brand, recently developed a hoppy, THC-infused sparkling water. And Molson Coors recently entered a joint venture with Hexo, a publicly-traded cultivator, to produce marijuana-infused beer for the Canadian market.
“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,” Vivien Azer, an analyst at the investment bank Cowen said in a note on Tuesday.
“We expect to see CBD used as a functional ingredient in non-alcoholic beverages,” Azer said.