Canadian Cannabis Industry Sees Big Investment from Big Tobacco

In “news that is sure to thrill Canadian (and potentially global) consumers of both cannabis and tobacco,” Marijuana Business Daily reported last week that Big Tobacco has made its largest investment to date into North American cannabis.

This news validates the crazy conspiracy theories of your stoner buddy in college who never changed his faded Rush T-shirt and held forth at every smoke session that “The cigarette companies are totally gonna get into weed once it’s legal, brah.” Turns out he was right!

Per Marijuana Business Daily: Altria Group, a huge player in North American tobacco that owns Marlboro cancer-stick maker Phillip Morris, is investing 2.4 billion Canadian dollars (that’s $1.8 billion American) into Ontario cannabis producer Cronos, with whom they’re exclusively partnering for international distribution and development of new products and projects.

The deal will be finalized in the first half of 2019.

Altria will then own 45 percent of Cronos, with warrants that if activated, will increase their stake to 55 percent, and pump another $1.4 billion Canadian into the cannabis company.

The CEO of Cronos says that this investment won’t result in a billion dollars worth of grow facilities popping up across Canada, but will instead focus on things like “genetics, technical assistance, taking back the product and ultimately processing it, formulating it, branding it and distributing it.”

This isn’t the first time a tobacco company has invested into the cannabis industry.

Earlier this year, two Canadian cannabis brands sold a controlling interest in their companies to tobacco, and in June, a British tobacco company made an investment into a UK based medical cannabis company start-up.

Because nothing goes together like medical cannabis and cigarettes.

It remains to be seen how consumers will respond to having producers of tobacco involved in the green rush, as cannabis is often touted as a potential medicine for numerous ailments, while no one has made that claim about tobacco since 1955.

Some not so fun facts about tobacco, from the World Health Organization and the CDC:

• Tobacco kills half of its users.
• Tobacco kills more than 7 million users each year worldwide.
• More than 6 million of those deaths are a result of people using tobacco, and 890,000 additional deaths are due to exposure to secondhand tobacco smoke.
• In 2004, 28 percent of those 890,000 deaths were children exposed to secondhand smoke, or more than 249,000 children.
• Cigarette smoking is responsible for more than 480,000 deaths per year in the United States, including more than 41,000 deaths resulting from secondhand smoke exposure. This is about one in five deaths annually, or 1,300 deaths every day.

No word if the new partnership will result in a “OG Merchant of Death Kush” strain.

Josh Taylor is a well-known and successful entrepreneur in the legal cannabis space, producing B2B and B2C cannabis events, "Backstage Budtending" and upscale concierge services through his companies and His weekly syndicated newspaper column and features about cannabis ran for five years until March 2020.

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