The deal gives Altria an up to 55 per cent stake in Cronos and is the latest in a string of investments from consumer companies hoping to benefit from Canada's move to legalize marijuana for recreational use.
"Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth", said Cronos CEO Mike Gorenstein in a statement. The company could also be positioning itself for the possible legalization of marijuana across the U.S., Quartz added.
In June, London-based tobacco company Imperial Brands Plc took an undisclosed stake in closely held Oxford Cannabinoid.
However, the global cannabis opportunity remains "large and untapped", said Vivien Azer, an analyst with Cowen. Federal data from November showed cigarette smoking among USA adults reached an estimated 14 per cent in 2017, the lowest level ever. The Altria-Cronos deal is "encouraging" given the broad potential uses for cannabis such as in pharmaceuticals and health and wellness products, she said in a note to clients.
"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.
In June, British tobacco giant Imperial Brands was among investors taking a stake in Oxford Cannabinoid Technologies, a United Kingdom-based medical cannabis startup. That is a 16.2% premium over the stock's Thursday close, according to Reuters.
The investment comes a little more than a year after Corona beer distributor Constellation Brands announced that it would invest billions of dollars in Canopy Growth Corporation (NYSE: CGC). The decision by Altria to go ahead with an investment in Cronos shows that Altria is serious about investing in marijuana as a new growth area as sales of traditional cigarettes slow.
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".
Watford 0 Manchester City 2
West Ham ended Newcastle's three-match winning run as Javier Hernandez struck twice in a 3-0 victory at St James Park. The opener was the sixth time this season that United have conceded a goal in the first 15 minutes of a match.
General Motors to slash 14,700 jobs in USA and Canada
The company also said the plan would make the company more efficient, saving it $6 billion a year by the end of 2020. The four American plants employ a combined 3,800 hourly and salaried staff, and the Oshawa facility employs 2,200.
NASA chooses private companies for future moon landings
One of the nine companies will be tasked with delivering science and technology payloads to the surface of the Moon for NASA. Speaking later to AFP , Bridenstine said the review shows how seriously NASA takes the safety of its astronauts.
Ivanka Trump on Private Email Use
It has also raised security concerns, particularly over classified or sensitive information and the possibility of hacking. The FBI found classified information in some of the emails that were sent or received through her private server.
Deontay Wilder vs. Tyson Fury
Asked which fight Wilder would prefer - Joshua or Fury - the 33-year-old replied: "I would love to go for the other titles". It was a great fight, so let's do it again. "That's what we proved tonight, and I'm ready to do it again".
Baker Mayfield Has A Strong Message For ESPN Analyst
Former NFL player Damien Woody criticized Mayfield on ESPN's First Take , saying the rookie needed to "grow up". This season, Mayfield has been spectacular for the Browns, leading them to four more wins than past year .
Murray Wins Davey O'Brien Award
He received a $4.6 million signing bonus from the A's with the expectation that this would be his last season on the gridiron. And only five Heisman winners have failed to win AP Player of the Year since the award started in 1998.