From The Huffington Post:
A little glimpse into Coke’s history reveals all.
Yes, most people know that Coca-Cola’s first president Asa Candler became concerned about cocaine in the early 1900s and decided to remove any trace of the drug in the company’s famous drink, but few people know that Coke continued to use what is called “decocainized coca leaf extract” in its signature beverage. In company ledgers, this―mixed with kola nut powder― is what is known as Merchandise #5, one of the “secret ingredients.”
Here’s how the process works. Beginning in the early 1900s, Coca-Cola partnered with a company called Maywood Chemical Works based in Maywood, New Jersey (now the Stepan Company) to import coca leaves (which contain small quantities of the alkaloid found in purified cocaine powder) from Peru for Coca-Cola. The company removed the cocaine alkaloid from these leaves and then sold Coca-Cola the leftover extract. As per the cocaine, Maywood sold it under close federal supervision for approved medical uses.
Federal law sanctioned this practice. Legislators wrote a special exemption into the Harrison Narcotics Act of 1914, the Jones-Miller Act of 1922, and subsequent counternarcotics legislation that allowed “decocainized coca leaves or preparations therefrom” to be sold in the United States. Some lawmakers called this clause the “Coca-Cola joker” because it was clearly designed to protect Coke’s secretive coca business.
Over time, Coke’s demand for coca leaves grew so great that legislation had to be passed to allow leaves to come into the country beyond what was needed for the manufacture of cocaine for medicinal purposes. These laws specified that alkaloids extracted from these coca leaves had to be destroyed with federal officials bearing witness.