If you can't beat 'em, join 'em.
A few months ago it was reported that Altria, the parent company of Philip Morris, which manufactures Marlboro cigarettes, was wading into the marijuana territory and now, that news has been confirmed with the tobacco company, one of the largest in the world, investing $2.4 billion into Canadian medical and recreational marijuana company Cronos Group.
This new investment gives Altria a stake of 45 percent in the Toronto-based organization, and is looking toward a 55 percent majority ownership stake if it goes through with another $1.4 billion round.
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"I’m still running on adrenaline,” says Cronos CEO Mike Gorenstein. “We just got a new partner and now resources — but beyond that, the network and support [Altria] can offer — being able to have that experience. It’s an alignment and a partnership but it’s not like the deal is over. We’re all very, very excited about the beginning, and we can now go and do the things we want to do.”
It's a particularly shrewd investment for the Richmond, Virginia-based company as popularity for tobacco products wanes in North America while the cannabis industry continues to experience considerable expansion as legalization laws spread across the continent and the globe.
This year, recreational use of marijuana was legalized in all of Canada, while states in the U.S. continue to pass legislation that does the same. The most recent state to do so was Michigan, which also placed into action the largest legal carry amount in the United States with 2.5 ounces.