Marlboro owner Altria Invests in Cannabis

pgabriel · Dec 10, 2018

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Marlboro owner Altria invests $1.8B in cannabis company Cronos
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The maker of Marlboro cigarettes is joining some of the biggest names in beer and exploring the cannabis marketplace.

Saturday, December 08, 2018 11:09PM
One of the world's biggest tobacco companies is diving into the cannabis market with a $1.8 billion buy-in.

Marlboro maker Altria Group Inc. is taking a 45 percent stake in Cronos Group, the Canadian medical and recreational mar1juana provider said Friday.

The agreement includes a warrant to acquire additional shares over the next four years that could give the Altria, which is based in Richmond, Virginia, a 55 percent ownership stake in the Toronto company.

That would mean Altria's investment would be in the same league as the $4 billion spent earlier this year by Constellation Brands to acquire shares of Canopy Growth Corp., another Canadian pot producer.

The August investment by Constellation, which makes Corona and other beverages, was the largest to date by a major U.S. corporation in the cannabis market.

Whatever hesitation larger corporations in the U.S. had about entering the cannabis market appears to be fading if there is a financial justification.

Altria's huge investment lit up shares of cannabis companies that have begun to set up shop in Canada, where recreational use was legalized this year.

U.S. traded shares of of Cronos Group Inc. jumped 22 percent Friday.

Rapid growth in the cannabis market is expected to continue as legalization expands in the U.S. and social norms change. On Tuesday, ultra-conservative Utah became the latest state to legalize mar1juana use for medical purposes.

Consumers are expected to spend $57 billion per year worldwide on legal cannabis by 2027, according to Arcview Market Research, a cannabis-focused investment firm. In North America, that spending is expected to grow from $9.2 billion in 2017 to $47.3 billion in 2027.
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donkeypunch · Dec 10, 2018

This is a huge deal.

seclusion · Dec 10, 2018

donkeypunch said: ↑

This is a huge deal.
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On the one hand, yay cannabis. On the other hand, I don't trust tobacco companies. I don't want them to put additional carcinogens in one thing and start marketing it as another if you feel me.

Asian Sensation · Dec 10, 2018

I can roll my own joints.

donkeypunch · Dec 10, 2018

seclusion said: ↑

On the one hand, yay cannabis. On the other hand, I don't trust tobacco companies. I don't want them to put additional carcinogens in one thing and start marketing it as another if you feel me.
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For sure. I was just saying it was a huge deal for cannabis taking one huge step into being legalized everywhere. Dont give two ***** for Altria or big tobacco themselves, Altria is the biggest one of them all.

Dr of Dunk · Dec 10, 2018

I think this happened a couple of days ago and had been rumored for months which is why Cronos stock had been popping. I've owned Altria stock for over a decade -- that thing is a compounding cash cow. Constellation Brands' investment in Canopy Growth was over twice as big as this, but these are the 2 biggest investments in pot stocks that I know of.

Next up... Coca Cola needs to get into the market. They've been rumored to be trying to get a deal going with companies like Aurora Cannabis to create CBD-infused drinks.

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