Pubdate: Fri, 07 Dec 2018
Source: Honolulu Star-Advertiser (HI)
Copyright: 2018 Star Advertiser


NEW YORK - One of the world's biggest tobacco companies is diving into
the cannabis market with a $1.8 billion buy-in.

Store manager Stephanie Hunt posed for photos, in July 2015, with a
pack of Marlboro cigarettes, an Altria brand, at a Smoker Friendly
shop in Pittsburgh. Altria is diving into the Canadian cannabis market
with a $2.4 billion investment in Toronto-based medical and
recreational marijuana provider Cronos Group.

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

The agreement includes a warrant to acquire additional shares over the
next four years that could give the Altria, which is based in
Richmond, Virginia, 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

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.

U.S. traded shares of of Cronos Group Inc. jumped 22 percent today.

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.
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MAP posted-by: Matt