Walmart may be the next big retailer to get into the marijuana business.
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.
Read more of our cannabis industry coverage:
- Hedge fund legend Leon Cooperman is investing in the marijuana industry — and it's another sign the sector is heating up
- Famous short seller Andrew Left is creating a cannabis fund. He explains why the market's not in a bubble, but does need to 'chill out'
- One of the world's largest beer makers is about to start producing marijuana-infused drinks
- 'These things rarely happen in someone's career': Activist investor thinks a marijuana cultivator's stock is wildly undervalued
- The rising stars of marijuana's investment scene that everyone from Wall Street to Silicon Valley should know
