Auxly Cannabis finalized an investment from Imperial Brands worth 123 million Canadian dollars ($92 million), one of the largest investments yet from a tobacco company in the marijuana industry.
The British multinational tobacco company picks up a 19.9% stake in British Columbia-based Auxly as part of the deal.
In return, Auxly gets licenses for Imperial’s vaping technology and access to its vapor innovation business, Nerudia.
Auxly also becomes Imperial’s exclusive international partner for the future development of cannabis products.
Tobacco companies have been exploring the cannabis industry for new growth opportunities.
Ontario-based Cronos Group was the recipient of a CA$2.4 billion investment from Altria earlier this year.
Philip Morris is the first tobacco company to commercialize a cannabis inhaler via its $20 million investment in the Israeli company Syqe Medical.
Syqe’s inhaler is on the market in Israel.
Syqe recently signed a deal to enter the Canadian market via an exclusive distribution agreement with TerrAscend Corp.
Auxly’s joint venture, Sunens Farms, is expected to finish construction of a CA$150 million greenhouse in Leamington, Ontario, later this year.
Auxly’s shares are traded on the TSX Venture Exchange as XLY.
Shares of Imperial Brands are traded on the London Stock Exchange as IMB.