Marlboro maker places $2.4 billion bet on marijuana

SHARE Marlboro maker places $2.4 billion bet on marijuana
ap18341483597731_e1544191010345.jpg

Marlboro maker Altria is diving into the Canadian cannabis market with a $2.4 billion investment in Toronto-based medical and recreational marijuana provider Cronos Group. | AP file photo

NEW YORK — One of the world’s biggest tobacco companies is diving into the cannabis market with a $2.4 billion buy-in.

Marlboro maker Altria Group Inc. is taking a 45 percent stake in Cronos Group, the Canadian medical and recreational marijuana provider said Friday.

Altria will pay another $1.4 billion for warrants that if exercised, would give the Altria a 55 percent ownership stake in the Toronto company.

That would mean Altria’s investment would be in the same league as the $4 billion spent earlier this year by Constellation Brands to acquire shares of Canopy Growth Corp., another Canadian pot producer.

The August investment by Constellation, which makes Corona and other beverages, was the largest to date by a major U.S. corporation in the cannabis market.

Whatever hesitation larger corporations in the U.S. had about entering the cannabis market appears to be fading if there is a financial justification.

Altria’s huge investment lit up shares of cannabis companies that have begun to set up shop in Canada, where recreational use was legalized this year.

Shares of Cronos Group Inc. jumped 31 percent and neared an all-time high at the opening bell Friday.

Rapid growth in the cannabis market is expected to continue as legalization expands in the U.S. and social norms change. On Tuesday, ultra-conservative Utah became the latest state to legalize marijuana use for medical purposes.

Consumers are expected to spend $57 billion per year worldwide on legal cannabis by 2027, according to Arcview Market Research, a cannabis-focused investment firm. In North America, that spending is expected to grow from $9.2 billion in 2017 to $47.3 billion in 2027.

The Latest
The acquisition of Tamarack Farms makes Hackmatack National Wildlife Refuge a more impactful destination and creates within Hackmatack a major macrosite for conservation.
The man was found unresponsive in an alley in the 10700 block of South Lowe Avenue, police said.
The man suffered head trauma and was pronounced dead at University of Chicago Medical Center, police said.
Another federal judge in Chicago who also has dismissed gun cases based on the same Supreme Court ruling says the high court’s decision in what’s known as the Bruen case will “inevitably lead to more gun violence, more dead citizens and more devastated communities.”
Women make up just 10% of those in careers such as green infrastructure and clean and renewable energy, a leader from Openlands writes. Apprenticeships and other training opportunities are some of the ways to get more women into this growing job sector.