BAT Interested in Entering Cannabis Business

Global tobacco company launched its first CBD vapor product in the U.K.
British American Tobacco building sign
Photograph: Shutterstock

LONDON —British American Tobacco (BAT) plc is looking to get in the cannabis business—and has already started a pilot cannabidiol (CBD) vaping product in the U.K.

The company’s chief marketing officer, Kingsley Wheaton, told CNBC’s “Squawk Box Europe” in February that CBD is one of the products it has its eye on. BAT did not respond to CSP’s request for more information on the topic.

“We are indeed going to think about, and we are going beyond, just the tobacco and nicotine space,” Wheaton said to CNBC.

The London-based maker of Lucky Strike cigarettes said it remains cautious, however, about cannabis as many markets remain inaccessible for regulatory reasons.

“We draw a very big distinction between CBD and other forms of cannabis,” Wheaton said to CNBC. “We’re interested in CBD. But I think the bigger point is we’re trying to build the portfolio of the future for our business. We’re trying to build the brands of the future. We’re trying to meet consumer needs that smoking used to meet with a new transformed portfolio.”

BAT has already pilot-launched its first CBD vaping product, Vuse CBD Zone, in Manchester, U.K. It is available in mint, mango and berry at two strengths, 50 and 100 milligrams.

“CBD vaping is a new category for us, and we will be using this pilot launch to gain key learnings about consumer and retailer experiences, combined with our extensive expertise and knowledge of vaping, to help inform plans for a potential nationwide roll-out of Vuse CBD Zone later in the year,” Fredrik Svensson, general manager at BAT UK and Ireland, said in a statement on BAT’s website.

In the United States, the 2018 Farm Bill opened the door for CBD products, but there are still some gray areas in the category. Many convenience-store retailers have started selling CBD, a nonpsychoactive component of cannabis, in forms like beverages and gummies.

BAT, which acquired Reynolds American Inc. in 2017, is a global cigarette and vapor company. Its brands include Vuse and Vuse Alto vaping products from R.J. Reynolds Vapor Co. and cigarette brands like Pall Mall, Rothmans, Newport, Camel and Natural American Spirit.

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