Tobacco giant invests $2.4B in Canadian cannabis producer
tobacco giant altria Group will invest $2.4 billion in canadian cannabis producer cronos group for a 45% ownership stake as the global market for legal pot continues to grow.
Virginia-based altria, parent of the company that makes marlboro cigarettes, can also invest up to a further $1.4 billion within four years that would increase its ownership stake in toronto-based cronos to 55%, under the arrangement.
“altria brings scale, expertise and complimentary capabilities ... that we believe will enable us to expand the scope and enhance the scale of our company,” mike Gorenstein, chairman, president and chief executive officer of cronos, said on a call with analysts Friday. as part of the agreement, altria will have the right to nominate four directors to the cronos board, which will be expanded to seven members from five.
“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 Friday in a statement. “We believe that cronos Group’s excellent management team has built capabilities necessary to compete globally, and we look forward to helping cronos Group realize its significant growth potential.”
cronos will remain a canadian company, headquartered in toronto, Gorenstein said.