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Tobacco

Big Tobacco Harvesting Pot Maker?

Altria in talks to buy Canadian marijuana producer, report says
Photograph: Shutterstock

RICHMOND, Va. – Canada is emerging as a stepping stone for U.S. manufacturers and retailers wanting to get into the marijuana business, with U.S. tobacco maker Altria Group Inc. reportedly in talks to purchase a marijuana producer north of the border.

Reuters reported that people familiar with the matter say the Richmond, Va.-based maker of Marlboro cigarettes is in talks to acquire Canadian cannabis producer Cronos Group Inc., Toronto, as a way to diversify its tobacco business.

On Dec. 3, Cronos issued a press release confirming the discussions and saying, “No agreement has been reached with respect to any such transaction and there can be no assurance such discussions will lead to an investment or other transaction involving the companies.”

Altria did not reply by the time Reuters posted its story.

Pot became legal in Canada this past October. Over the past several months, speculation about how U.S. manufacturers and retailers could become involved in the marijuana business has emerged, with at least one convenience-store chain, Alimentation Couche-Tard, Laval, Quebec, publicly musing about its potential participation.

Cronos has 100% ownership in two companies, Peace Naturals and Original BC, both of which are tied to the production and sale of medical marijuana. It also has a 21.5% interest in Whistler Medical Marijuana Co., which also produces and sells medical marijuana.

Altria is a Fortune 200 company with about $26 billion in annual revenue. It owns Philip Morris USA, the maker of Marlboro cigarettes, as well as companies that produce cigars and other tobacco products (OTP). Altria is reportedly also in talks to buy a minority stake in e-cigarette maker Juul Labs, San Francisco.

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