Marl­boro maker takes stake in cannabis firm

The Washington Post - - ECONOMY & BUSINESS -

One of the world’s big­gest tobacco com­pa­nies is div­ing into the cannabis mar­ket with a $1.8 bil­lion buy-in.

Marl­boro maker Al­tria Group is tak­ing a 45 per­cent stake in Cronos Group, the Cana­dian med­i­cal and recre­ational mar­i­juana provider said Fri­day.

The agree­ment in­cludes a war­rant to ac­quire ad­di­tional shares over the next four years that could give Rich­mond-based Al­tria a 55 per­cent own­er­ship stake in the Toronto com­pany.

That would mean Al­tria’s in­vest­ment would be in the same league as the $4 bil­lion spent ear­lier this year by Con­stel­la­tion Brands to ac­quire shares of Canopy Growth, an­other Cana­dian pot pro­ducer.

The Au­gust in­vest­ment by Con­stel­la­tion, which makes Corona and other bev­er­ages, was the largest to date by a ma­jor U.S. cor­po­ra­tion in the cannabis mar­ket.

What­ever hes­i­ta­tion larger cor­po­ra­tions in the United States had about en­ter­ing the cannabis mar­ket ap­pears to be fad­ing if there is a fi­nan­cial jus­ti­fi­ca­tion.

Al­tria’s huge in­vest­ment lit up shares of cannabis com­pa­nies that have be­gun to set up shop in Canada, where recre­ational use was le­gal­ized this year.

U.S. traded shares of Cronos Group jumped 22 per­cent Fri­day.

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