Altria’s Canadian Pot Bet Is Really About the U.S.
Big Tobacco finally made its move, and the company may be hooked on M&A.
Once you start, it's hard to stop.
Photographer: Ben Nelms/BloombergIt’s official: Big Tobacco is now a player in the cannabis market. That will change the game.
Altria Group Inc., the maker of Marlboro cigarettes, announced Friday that it agreed to pay $1.8 billion for a 45 percent stake in Cronos Group Inc., one of Canada’s fast-growing cannabis companies. The deal comes about two months after Canada legalized marijuana for adult use, though American giants that have begun to show interest in cannabis are doing so with an eye toward the larger U.S. market. Pot is still federally illegal in the U.S., but a significant investment from Altria — which doesn’t often make big purchases — signals that an industry most astute to the regulatory landscape sees legalization just around the corner. It also validates what’s been a hot area for stocks that some feared might turn out to be a bubble.