Published: Mon, December 10, 2018
Finance | By Kristine Clayton

A look at where companies stand on marijuana business | AP business

A look at where companies stand on marijuana business | AP business

Altria's stock fell by almost 25 percent this year and revenue is expected to grow by only 1 percent this year and in 2019, CNN Business reported.

"It's really become a place where numerous leading companies that want to compete for leadership throughout the world in the cannabis business have been locating", Willard said of Canada.

The president and CEO of Cronos, Mike Gorenstein, says the agreement with Altria will give the Toronto-based company the resources to expand more quickly and increase its investments in research and development. It comes after Canada legalized the recreational use of marijuana this year, and several other jurisdictions, including some states in the United States, follow suit. Pot producer Canopy Growth Corp's shares in Toronto rose 3.5 per cent to close at $41.75.

Altria's investment marks the latest move by a USA company in an established industry to tap the burgeoning Canadian cannabis industry.

The cigarette maker's move follows modest investments in the cannabis sector in the past year by tobacco companies Imperial Brands and Pyxus International, formerly Alliance One International.

Coca Cola bottle and glass on picnic table
Coca Cola bottle and glass on picnic table

"Altria's experience is very wide-ranging - not just in tobacco, but in adult beverages in different categories and decades of experience in how to bring different products to market", Cronos chief executive Michael Gorenstein said on call with analysts. 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". If exercised in full, Altria would own 55% of the company.

As well, US tobacco leaf merchant Alliance One International said its subsidiary acquired a 75 per cent equity stake in Charlottetown-based Canada's Island Garden in January.

Reuters had first reported on the deal negotiations on Monday. Molson Coors Canada owns a 57.5 percent interest in the joint venture.

According to Bloomberg, Altria acquired 146.2 million shares of the company.

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. 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.

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