Tobacco

BAT to Work on Next-Generation Cannabis Products

Tobacco company to collaborate with Organigram
Cannabis on field
Photograph: Shutterstock

LONDON — British American Tobacco (BAT) is working with a Canadian cannabis licensed producer to accelerate its beyond nicotine strategy.

BAT signed a strategic collaboration agreement with Organigram Inc. focused on research and product development activities of next-generation adult cannabis products, with an initial focus on cannabidiol (CBD), the non-psychoactive compound derived from cannabis plants.

London-based BAT already pilot-launched its first CBD vaping product, Vuse CBD Zone, in Manchester U.K. and has announced its intentions to make products outside of tobacco and nicotine.

Through the partnership with Organigram Inc., BAT will gain access to research and development technologies, product innovation and cannabis expertise.

The approach will help provide choice and meet the evolving needs of adult consumers, David O’Reilly, director of scientific research at BAT, said. The company, under its build A Better Tomorrow plan, aims to increase the number of its non-combustible product consumers to 50 million by 2030.

“We believe this collaboration has significant potential to enhance our activities, allowing us to combine our world-class expertise while enabling scientists from both BAT and Organigram to work closely together and share information real-time. We know that in R&D this is how you make real breakthroughs and accelerate progress,” O’Reilly said.

As part of the deal, a Centre of Excellence will be established at Organigram’s facility in New Brunswick, Canada, to focus on developing the next generation of cannabis products with the initial focus on CBD. Both BAT and Organigram can independently commercialize any products developed as a result of the collaboration under their own brands.

A BAT subsidiary will acquire a 19.9% equity stake in publicly traded Organigram Holdings Inc., which Organigram Inc. is a wholly owned subsidiary of.

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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