Marlboro Boss Invests Billions In Marajuana Company After Canada Legalised The Drug

Marlboro-maker Altria has made a $2.4-billion investment in licensed cannabis producer Cronos

Marlboro cigarette maker Altria Group Inc made a big bet on the rapidly growing marijuana industry on Friday with a $2.4 billion investment in Canadian cannabis producer Cronos Group Inc. The move will help it tap into a customer base outside cigarette smokers, as cigarette smoking declines in the U.S.

Altria also will receive warrants, which, if exercised, would increase its ownership to 55% and provide an additional CA$1.4 billion in proceeds for the integrated marijuana company.

"Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria", said Howard Willard, Altria's Chairman and Chief Executive Officer.

Altria has agreed to pay $16.25 per share to acquire 146.2 million shares of Cronos, which represents a 41.5 premium above the stock before it confirmed the companies' preliminary discussions.

As part of the agreement, Altria will be able to nominate four members to Cronos Group's board of directors.

"As a company that operates predominantly in the highly-regulated tobacco industry, we believe Altria has valuable regulatory and compliance experience that could end up being a key competitive advantage for Cronos, as it competes with other licensed producers for what seems to be a growing set of worldwide opportunities", Canaccord Genuity analysts wrote in a research note. The transaction is expected to close in the first half of 2019.

Neo-Nazi convicted of murder over Charlottesville rampage, faces life term
And many also wore red Make America Great Again hats, saying they were encouraged in the public display of their beliefs by U.S. President Donald Trump, who later that week would say that there were "very fine people" on both sides of the demonstration.

Several die in stampede at Italian nightclub
The ages of the victims were not immediately given and it was not yet clear how many people were inside when the stampede erupted. The barrier then appeared to give way, and a cascade of teenagers tumbled over it, falling on top of each other.

‘Kedarnath’ screening banned across Uttarakhand, says state tourism minister
The ban has been imposed by the district magistrates of Uttarakhand in order to protect the law and order of the state. Those seeking a ban on the film accused it of hurting Hindu sentiments and alleged that it was promoting love jihad .

"We believe cannabis is an excellent strategic fit for tobacco", Jefferies analyst Owen Bennett said in a research note earlier this week.

The Cronos investment follows other deals in this space.

Canadian marijuana company Canopy Growth (CGC) already has received a multibillion dollar investment from Corona owner Constellation Brands (STZ).

Gorenstein said that Altria has "decades of experience in regulatory, government affairs, compliance, product development and brand management that we expect to leverage, particularly as new markets for cannabis open around the world". Altria is paying 25 times forward sales, she said, and in her view, Altria is "buying their way out of a bind" after nearly two decades of volume decline for USA cigarettes, and a challenging 2018 for e-cigarettes.

This will bring the megabucks investment up to the same level as the CAN $4bn (US $3bn / £2.3bn) which Constellation Brands spent earlier this year when they bought out Canopy Growth Corp., a cannabis producer also based in Canada. In 2014, Altria acquired e-cigarette startup GreenSmoke Inc for $110 million.

Altria is also in talks to take a minority stake of between 20 per cent and 40 per cent in e-cigarette maker Juul Labs Inc, sources told Reuters last month.

Related:

Comments

Latest news

Splashdown! SpaceX Rocket Topples into Water Following Technical Glitch
SpaceX and Boeing have signed a contract with NASA to send U.S. astronauts to the International Space Station . The Dragon space capsule that flew on Wednesday was used once before, on a supply mission in February 2017.

James Corden re-enacts 'Thank U, Next' - and Ariana Grande approves
Later: "I'm so frickin' grateful for his pecks". "I thought it was very sweet", Goldblum replies. "It's for a friend. promise". In the spoof, Corden rocks silky pajamas, and looks at a " Thank U, Jeff " book, imitating Grande in the music video.

Grace Millane: Disappearance of British backpacker being investigated as murder
Grace was last seen wearing a black dress with white sneakers on Queen Street, in Auckland's CBD, at around 9.41pm last Saturday . He was brought back here to Auckland Central Police Station and is now speaking to us in relation to the murder of Grace Millane.

New Australian Law Poses Risk to Encrypted Services
Australian Prime Minister Scott Morrison leaves the House of Representatives after debate on amendments to the encryption laws. Australia's decision is the most serious attempt by any national parliament so far to rein in tech companies involuntarily.

Stranger Things 16-bit game announced based on season 3
Users will reportedly be able to take control of characters and go through some of the season's events, with surprises throughout. The forthcoming new season of Stranger Things will be accompanied by its own mobile game.

Epic Games Store has launched: Massive Rival to Steam Revealed
The store has been set up to rival the massive online Steam run by developer Valve that offers thousands of PC games. Definitely get on that even if you just install it and have no other plans for the Epic Store .

Crash Team Racing: Nitro Fueled Confirmed at The Game Awards
Take a look at the official trailer above and tell us in the comments if you're excited to head out onto the track with Crash . Crash Team Racing Nitro Fueled is a Crash Team Racing (PS1) remake complete with all of the original characters and courses.

‘CS: GO’ Goes Free, Adds Battle Royale Mode
Players can earn XP in Danger Zone by looting their environment, killing enemies and trying their best to survive. According to Valve, Danger Zone games should last around ten minutes, keeping the pace and action up.

Obsidian and Private Division Announce The Outer Worlds at The Game Awards
Am I totally off base or right on the money? Please do so now in the comments section provided below. We'll get you more info on The Outer Worlds as soon as we have it.

Obsidian and Private Division Announce The Outer Worlds at The Game Awards
Am I totally off base or right on the money? Please do so now in the comments section provided below. We'll get you more info on The Outer Worlds as soon as we have it.

Trump sending Air Force One to carry late President George H.W
After departing the Capitol, Bush's remains will be taken to Washington National Cathedral for a funeral. Former Secretary of State James Baker said the passing of his friend, former President George H.W.

Doctors blame tap water in neti pot for brain-eating amoeba
But when Cobbs operated to remove the mass, "it was just dead brain tissue", making it hard to determine what it actually was. For a month, she tried to get rid of it using a neti pot with tap water instead of using sterile water, as is recommended.

Milwaukee Bucks Trade Matthew Dellavedova to Cavaliers for George Hill
Dellavedova got his start in Cleveland , where he played for three seasons and helped the Cavaliers win the 2016 NBA Finals. The Cavs remain active in trade talks and according to Fedor , are "willing to take on extra salary" for more draft picks.

Real Madrid reportedly agree deal to sign Chelsea star Eden Hazard
Maurizio Sarri has been keen to tie his star player down to a new long-term contract, but admits the decision rests with Hazard . The future is bright for him'. "Should Chelsea's season peter out, it could be the last we see of Hazard in the Premier League ".

Tyler Perry plays 'Secret Santa,' pays off $434000 in Walmart layaways
For those who don't know, a layaway lets a customer reserve a product at a store and pay for it over time. News that Perry donated $432,635 to the stores.

Other news