Tobacco giant Altria makes massive bet on cannabis

Marlboro Maker Altria Takes 45% Stake In Cronos Group

Altria, the owner of cigarette giant Phillip Morris, will invest $2.4 billion in Canadian cannabis producer Cronos group, of Toronto, for a 45-per-cent ownership stake.

Altria will also pay another $1.4 billion for warrants that if exercised, would give the Altria a 55 percent ownership stake in the Toronto company. "And they're seeing a ton of growth", he said in an interview.

The cigarette maker's move follows modest investments in the cannabis sector in the past year by tobacco companies Imperial Brands and Pyxus International, formerly Alliance One International.

Altria's bet on Cronos could also prompt more similar deals in the sector, he added.

Also, the Canadian subsidiary of Molson Coors has a joint venture with The Hydropothecary Corporation for the production of "cannabis-infused drinks" in Canada.

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.

Russian Federation unveils plans to build human colony on moon
Bridenstine said he needs 100 percent commitment to safety from companies with which NASA does business. The two organizations are collaborating to fly astronauts to the International Space Station .

"Altria's experience is very wide-ranging - not just in tobacco, but in adult beverages in different categories and decades of experience in how to bring different products to market", Cronos chief executive Michael Gorenstein said on call with analysts. Aurora Cannabis Inc. rose as much as 11 percent, Canopy Growth Corp. climbed 7.3 percent and Tilray Inc. gained 5.5 percent.

Earlier this week, an article on The New York Times reported that Juul Labs and Altria are in talks, and that if a deal is struck, Altria will get a chunk of the three-year-old company, which this summer was valued at approximately $16 billion.

Altria agreed to acquire 146.2 million newly issued shares for C$16.25 each - a 16% premium from yesterday's close. A wave of cannabis producers have set up shop in Canada, where recreational use was legalised earlier this year.

Cronos said it will use the capital to accelerate its global growth and expansion, as well as research and development. Altria will make Cronos its exclusive partner for all world-wide cannabis-related investments, with some limited exceptions.

With smoking rates in the USA falling fast, Altria is under pressure to find new sources of revenue. It.

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