More Manufacturers Explore Legal Cannabis Opportunities

ALEXANDRIA, Va. – Altria, owner of Philip Morris USA and maker of Marlboro cigarettes, has announced it will explore opportunities in the legal cannabis market, as more states approve the substance for medical and/or recreational use, according to Foxbusiness.com.

Altria will invest $1.8 billion in Cronos Group, a global cannabinoid company in Toronto, Canada, for a 45% stake in the company. The deal grants Altria the option to acquire a controlling stake in Cronos at CAD $19 per share and to nominate four executives to the Cronos board of directors. This move indicates that Altria sees legalized marijuana as a new growth area at a time when sales of traditional cigarettes are declining.

“Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth,” said Mike Gorenstein, Cronos Group’s chairman, president and CEO. “The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers.”

Canada’s cannabis industry was legalized nationwide earlier this year. Demand for legal cannabis and cannabis-infused products is also growing in the U.S., where cannabidiol (CBD) product sales are expected to surpass $1 billion in 2018, reports the Hemp Business Journal.

Another company with eyes on the cannabis industry is Constellation Brands, the parent company of Corona beer. Constellation Brands acquired a $4 billion stake in Canadian pot producer Canopy Growth in August, upping its ownership of the company from 10% to 38%. Constellation Brands said at the time that the deal would “position Canopy Growth as the global leader in cannabis production, branding, intellectual property and retailing.”

Canopy Growth has said it will not sell marijuana products in the U.S. until pot is legalized at both the federal and state level.

Denver-based Molson-Coors Brewing has announced that its Canadian unit will partner with the Hydropothecary Corporation “to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market.” Molson-Coors Canada owns a 57.5% interest in the joint venture.

Meanwhile, the Heineken-owned beer brand Lagunitas is reportedly selling a cannabis-infused sparkling water in California.

While Coca-Cola has yet to announce any formal partnership, Bloomberg reported in September the beverage giant is talking with Aurora Cannabis of Canada. Downplaying the report, Coca-Cola officials said they were “closely watching” the CBD space but added “no decisions” had been made.

Pepsi hasn't completely ruled out a move into the market. When asked about cannabis during the company’s October earnings call, Hugh Johnston, CFO, told analysts that "it's fair to say we look at everything."