- Rick Wilking/Reuters
- Warren Buffett and his right-hand man Charlie Munger advised Coca-Cola not to enter the cannabis business.
- Buffett’s Berkshire Hathaway is the largest investor in the soft-drink maker, owning a $19.5 billion stake.
- Coca-Cola earlier this year held talks with the cannabis producer Aurora Cannabis about teaming up to make CBD-infused beverages. The talks ultimately failed.
- Watch Coca-Cola trade live.
Warren Buffett loves Coca-Cola.
So much so that he drinks five cans of the product a day. Additionally, his company, Berkshire Hathaway, is the largest shareholder of the soft-drink giant, owning a nearly 10% stake worth $19.5 billion.
So let’s just say that when Buffett talks about Coca-Cola, its management likely listens. And they might not like what he and his right-hand man, Charlie Munger, had to say on Friday.
“It would be a mistake for Coca-Cola to get into the marijuana – cannabis business,” the duo told Fox Business News’ Liz Claman. “They have a wholesome image and that would be detrimental to it.” Coca-Cola did not immediately respond to Markets Insider’s request for comment.
Talks with Aurora Cannabis to produce CBD-infused beverages ended a month later without a deal coming to fruition and executives have said that the company does not plan on getting into the cannabis space anytime soon.
But, Coca-Cola could be missing out on a huge opportunity if it heeds Buffett’s advice. The burgeoning CBD market in the US alone is expected to explode from $1 billion in 2019 to $16 billion by 2025, according to Cowen analyst Vivien Azer. And the market is already rapidy expanding.
Given the potential, Coca-Cola may have to ignore Buffett and Munger to take advantage of an opportunity the company can’t afford to miss.