Malboro Maker Invests $2.4 Billion into Cannabis Company-T.CRON-P.CANNABIS

"Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria", Howard Willard, Altria's chairman and chief executive officer said in a statement.

Similarly Cronos might be reluctant to agree to a deal, as this could preclude other potential partnerships with pharmaceutical, food or beverage companies.

Philip Morris International CEO Andre' Calantzopoulos discusses why his company is keeping clear of the cannabis industry. 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.

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. As a term of the investment, Altria will name four directors to Cronos' board, which will expand from five to seven members.

Cronos has benefited in recent months from Canada's legalization of recreational marijuana as well as more states jumping on the recreational and medical pot bandwagon last month through voter initiatives.


Cronos surpassed Aphria's market value for the first time this week and is now more than C$1 billion larger than its competitor.

Also, the Canadian subsidiary of Molson Coors has a joint venture with The Hydropothecary Corporation for the production of "cannabis-infused drinks" in Canada. Federal data from November showed cigarette smoking among USA adults reached an estimated 14 per cent in 2017, the lowest level ever.

Canadian marijuana company, Canopy Growth, for example, has received a multibillion dollar investment from Corona owner Constellation Brands, CNN reported. Aurora Cannabis Inc. rose as much as 11 percent, Canopy Growth Corp. climbed 7.3 percent and Tilray Inc. gained 5.5 percent.

With smoking rates in the U.S. falling fast, Altria is under pressure to find new sources of revenue. It.

Altria agreed to acquire 146.2 million newly issued shares for C$16.25 each - a 16% premium from yesterday's close.


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