The producer of Marlboro cigarettes, Altria, is looking to expand it’s business from traditional cigarettes to the ever-growing cannabis market as tobacco sales continuously diminish.
Marlboro plan is a future takeover of Cronos, a Canadian cannabis group that owns multiple subsidiary companies within the market. Following this revelation, Cronos stock shares grew by more than 6 percent on Nasdaq, bringing its total market value to almost $2 billion.
The cannabis industry continues to grow, especially CBD, which experts anticipate will reach over $22 billion within the next 3 years. On the other hand, the tobacco industry is slowly dwindling as cigarette smoking continues to decline. Studies show that only 14 percent of adults in the United States currently smoke cigarettes, this is the lowest number ever and it’s mostly concentrated in smaller regions throughout middle America. Altria alone has lost over 20 percent in market value this last year. Experts agree that smoking cannabis is not only safer than cigarettes, but it offers many therapeutic benefits that tobacco simply can’t provide. In short, one is good for your health, the other is hazardous.
According to representatives from Cronos, no official agreement has been made between them and Marlboro. As it stands, discussions have yet to begin between the corporations.
Should this deal go through, however, it would be one of the largest mergers between a cannabis business and mainstream company. Altria isn’t the first corporation invest in a cannabis company though. Since the industry is becoming legal and accepted in various parts of the world, there’s been an influx of investors looking to throw their money into the cannabis bucket.
Constellation Brands, maker of Corona, Modelo, and many other large names in the alcohol industry, announced last August that they plan to up their multi-billion dollar investment in Canopy Growth. In June, British tobacco company Imperial Brands made a (somewhat) private investment in London-based Oxford Cannabinoid. Even Coca-Cola is eyeing cannabis, with claims that they’re seeking to form a future union with an undisclosed CBD company.