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Tobacco

Altria Invests in Oral Nicotine Delivery

Deal with Lexaria could reach $12 million
Photograph: Shutterstock

RICHMOND, Va. -- In a deal that would expand the reach of one of the nation’s largest tobacco manufacturers into noncombustible products, Altria Group Inc. has invested in a Canadian developer of oral nicotine-delivery systems.

Richmond, Va.-based Altria, through a subsidiary, agreed to a research-and-development deal that could ultimately lead to a $12 million investment. Altria Ventures Inc. will pursue innovation in oral nicotine-delivery consumer products with Lexaria Nicotine LLC, a subsidiary of Lexaria Bioscience Corp., Kelowna, British Columbia.

The research will involve Lexaria’s patented technology DehydraTech, which enhances compounds in four “ingestible” categories: taste and smell, speed of action, bio-absorption and bio-availability, Lexaria officials said.

Altria will provide initial funding of $1 million, with the option of additional funding of up to $12 million through multiphased, private financing.

The deal grants Altria license to use Lexaria’s patented technology for oral nicotine delivery on an exclusive basis in the United States and a nonexclusive basis elsewhere globally.

The investment comes weeks after Altria announced it had purchased minority stakes in e-cigarette maker Juul Labs, San Francisco, for $12.8 billion and Cronos Group, a cannabis grower and producer based in Toronto, for $1.8 billion. Both moves extend the tobacco maker’s reach into new market areas.

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