Walmart is curious about cannabis. On Tuesday (Oct. 9), a Walmart spokesperson told Reuters that the company’s Canadian division has done “preliminary fact-finding” on cannabis-derived products, but has no immediate plans to enter the industry.
“As we would for any new industry, Walmart Canada has done some preliminary fact-finding on this issue, “ said Walmart spokesperson Diane Medeiros. “But we do not have plans to carry CBD products at this time.”
So you’re saying there’s a chance?
CBD stands for “cannabidiol,” a non-psychoactive chemical compound derived from the cannabis plant. It’s recently become in vogue in the $4.2 trillion wellness industry due to a wide range of purported benefits, including relief from anxiety, nausea, inflammation, and insomnia. If Walmart decides to start stocking CBD products, it would become the first major retailer to dip a toe into cannabis in Canada, where the federal government will legalize recreational marijuana use later this month, and hand retail and distribution reins over to Canadian states and provinces. Currently, Canadians with medical authorization have access to legal cannabis from the countries 120 licensed producers. Walmart’s shares rose 2.1% to $96.67 in late morning trading.
In many ways it’s no surprise a giant like Walmart would want in on weed, especially as it makes a push to produce more private-label products, which tend to have higher profit margins than stocking other company’s offerings. As Quartz’s Tim Fernholz has written, “Big Marijuana will soon be as real as, or even become, Big Alcohol.” Indeed, big corporate interest in cannabis abounds—and CBD seems to be the gateway drug. Last month, a Coca-Cola spokesperson told Bloomberg Business News the company “was closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world.” BNN Television reported Coke was in talks with Aurora, one of the three biggest cannabis companies in Canada, to develop the drinks. The corporate owners of Corona brand beer have also invested some $4 billion into a Canadian cannabis giant, Canopy, and the Heineken-owned label Lagunitas is already producing CBD-enhanced “hop water,” available in California.
At least in Canada, these producers might soon have to compete with products manufactured by Walmart.