Marlboro maker places $2.4 billion bet on marijuana

One of the world’s biggest tobacco companies is diving into the cannabis market with a $2.4 billion buy-in.

Posted: Dec 7, 2018 1:28 PM

NEW YORK (AP) — One of the world’s biggest tobacco companies is diving into the cannabis market with a $2.4 billion buy-in.

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

Altria will pay another $1.4 billion for warrants that if exercised, would give the Altria 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.

Shares of Cronos Group Inc. jumped 31 percent and neared an all-time high at the opening bell 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 marijuana 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.

Article Comments

Terre Haute
Overcast
70° wxIcon
Hi: 79° Lo: 61°
Feels Like: 70°
Robinson
Overcast
69° wxIcon
Hi: 79° Lo: 60°
Feels Like: 69°
Indianapolis
Overcast
71° wxIcon
Hi: 75° Lo: 62°
Feels Like: 71°
Rockville
Overcast
70° wxIcon
Hi: 77° Lo: 60°
Feels Like: 70°
Casey
Overcast
68° wxIcon
Hi: 78° Lo: 60°
Feels Like: 68°
Brazil
Overcast
70° wxIcon
Hi: 77° Lo: 61°
Feels Like: 70°
Marshall
Overcast
70° wxIcon
Hi: 79° Lo: 61°
Feels Like: 70°
AM Showers/Storms; Afternoon Sun.
WTHI Planner
WTHI Temps
WTHI Radar

Latest Video

Image

This cat got stuck in the washing machine for a full cycle, and lived to tell the tale

Image

Child molestation cases on the rise in Indiana

Image

All You Need to Know for Monday

Image

Showers and thunderstorms, late afternoon sunshine. High: 81°

Image

Post 346 wins Hayes Invite

Image

WVFCA All-Star 1st Day

Image

Amateur Radio Field Day

Image

Vermillion County Fair Exhibits

Image

12 Point Revitalization Work Nears Completion

Image

Sunday storms knock out power

WTHI Events