Tobacco giant Altria (parent company of Philip Morris) is investing $1.8B into Canadian cannabis company Cronos Group.
The investment will give Altria (also owner of Marlboro), a 45% stake in Cronos, with an option to increase its ownership to 55% over the next 5 years.
Puff, puff… pass?
It was only a matter of time before major cigarette companies got into the budding joint industry.
As Quartz notes, outlets have speculated since the ’60s that cig companies were waiting patiently to pounce on legalization, alleging that they had already copyrighted names like “Acapulco Gold” and “Tijuana Gold” in anticipation.
However, letters from key tobacco industry players vehemently denied the notion for decades. Of course, now that other companies are smelling the dank (such as Molson Coors and Constellation Brands), big cig is rippin’ and roaring to take a hit.
Looking for a re-light
Altria’s stock has fallen nearly 25% in 2018, and the company is expected to report a measly revenue growth of 1% this year, with the plateau expected to continue in 2019.
Bottom line, cigarette companies are fighting tooth-and-tar to remain relevant as people cut back on cancer sticks (Altria is also in talks to invest in Juul).
And, from a revenue standpoint, Altria isn’t in it for a contact high, they’re lookin’ to get stunk from a nearly $2B gravity bong, in hopes that going green will wean the company off its tobacco addiction.