(This story has been updated to include Cronos’ confirmation of the investment talks.)
Cronos Group – the Ontario, Canada-based cannabis multinational – confirmed it is engaged in discussions with tobacco giant Altria Group about a “potential investment” by the company that produces Marlboro cigarettes.
The announcement from Cronos came after Reuters reported that Altria – one of the largest tobacco companies in North America – is in “early stage talks” to acquire the marijuana firm.
In its statement, Cronos “confirmed that it is engaged in discussions concerning a potential investment by Altria Group Inc. … No agreement has been reached with respect to any such transaction and there can be no assurance such discussions will lead to an investment or other transaction involving the companies.”
Altria – owner of Marlboro maker Philip Morris USA and an investor in alcohol giant Anheuser-Busch InBev – has been assessing market opportunities in the cannabis industry.
If a deal is completed, it would mark the first significant investment in the cannabis sector by a large alcohol or tobacco company since Constellation Brands bought a stake in Ontario-based Canopy Growth.
That strategic relationship began in October 2017 and was expanded in August 2018 when Constellation announced an additional investment of 5 billion Canadian dollars ($3.78 billion) in the marijuana firm.
Since then a number of reported negotiations have failed to materialize into formal deals, including Coca-Cola with Alberta-based Aurora Cannabis and Diageo’s discussions with “at least three Canadian cannabis producers.”
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