Marlboro maker invests $2.4 billion in marijuana provider

Marlboro maker invests $2.4 billion in marijuana provider

Altria hopes pot is the key to help it grow beyond its stagnant cigarette business.

Tobacco leader Altria announced Friday that it was pouring $1.8 billion into the Canadian cannabis company Cronos, giving it 45 percent ownership with an option to have a majority stake in the next five years.

The transaction is expected to close in the first half of next year.

"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.

Altria also agreed to make Cronos its exclusive partner for worldwide cannabis opportunities.

Altria is paying 16.25 Canadian dollars per share in cash, or about US$12-a 40% premium over Cronos stock's recent trading level on the Toronto exchange, where it dual-lists with the Nasdaq.

"Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth", said Mike Gorenstein, Cronos Group's chairman, president and chief executive officer.

Hawaiian Monk Seals Face New Threat: Getting Eels Stuck Up Their Noses
Another is that startled eels get stuck there while attempting to flee the seals as the predators forage for food beneath rocks. It has since happened enough times for the monk seal program to develop guidelines on how to remove the eels.

In a separate news release Friday, Altria said it is discontinuing its existing e-cigarette brands and will take a US$200-million charge on these assets in its next quarter.

With Democrats winning control of the US House, Congress may finally pass the Farm Bill, which would make it legal to produce hemp and potentially open the door for more products containing cannabidiol, or CBD.

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.

The exclusive partnership will give Cronos additional financial resources, regulatory expertise and product development and commercialization capabilities to tap global cannabis opportunities, the company said in the announcement.

But Coke shot down the talk in October.

Also, the Canadian subsidiary of Molson Coors has a joint venture with The Hydropothecary Corporation for the production of "cannabis-infused drinks" in Canada. Lagunitas, a beer brand owned by Heineken (HEINY), is selling a cannabis-infused sparkling water brand in California.

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