Economy

Marlboro Maker Places $2.4 Billion Bet On Legal Marijuana

Marlboro Maker Places $2.4 Billion Bet On Legal Marijuana

The country has largely been celebrating ever since, but in an unexpected step one of the biggest cigarette firms in the world has announced that it is pumping an incredible CAN $3.8 billion (US $2.9bn / £2.2bn) into the cannabis market.

Altria Group, which owns multiple big tobacco brands like Marlboro and Skoal, announced a $1.8 billion investment into Canadian cannabis company Cronos Group at approximately $12.19 a share.

Altria also agreed to make Cronos its exclusive partner for global cannabis opportunities.

The deal gives Altria an up to 55 per cent stake in Cronos and is the latest in a string of investments from consumer companies hoping to benefit from Canada's move to legalize marijuana for recreational use.

In June, British tobacco giant Imperial Brands was among investors taking a stake in Oxford Cannabinoid Technologies, a United Kingdom-based medical cannabis startup.

Major pot stocks have generally pulled back from their highs in recent weeks amid reports of supply shortages and complications with the sales process under the new regime. The company could also be positioning itself for the possible legalization of marijuana across the U.S., Quartz added.

Cronos, meanwhile, grows and sells medical and recreational cannabis in Canada, operating two growing facilities in Ontario and one in British Columbia.

"We believe an investment of this magnitude provides overall legitimacy to the industry as a whole and should represent a positive catalyst for the sector", he said.

Los Angeles Sparks Hire Derek Fisher As Head Coach
Derek Fisher was 40-96 in two seasons as the coach of the New York Knicks in the National Basketball Association . The former National Basketball Association player and coach will be introduced at a news conference on Friday.

Altria will nominate four directors to an expanded seven-member Cronos board. "And they're seeing a ton of growth", he said in an interview.

As well, US tobacco leaf merchant Alliance One International said its subsidiary acquired a 75 per cent equity stake in Charlottetown-based Canada's Island Garden in January.

The parent company of Corona beer acquired a $4 billion stake in Canada-based pot producer Canopy Growth last August, upping its ownership of the company to 38 percent from about 10 percent.

As well, USA tobacco leaf merchant Alliance One International said its subsidiary acquired a 75 per cent equity stake in Charlottetown-based Canada's Island Garden in January.

Prior to Friday's announcement, Cronos had confirmed reports that it was in talks with Altria.

Altria has agreed to pay $16.25 per share to acquire 146.2 million shares of Cronos.

It will also acquire warrants that will allow Altria to buy more stock at $19 per share within four years.

Rapid growth in the cannabis market is expected to continue as legalisation expands in the U.S. and social norms change.