Altria, the manufacturer behind Marlboro and one of the biggest players in the tobacco industry, is looking at new investment opportunities to counter the continuing decline of traditional combustible cigarettes. Altria has revealed it’s investing $1.8 billion in the Cronos Group, a Canadian cannabis company.
With its $1.8 billion investment, Altria will have a 45 percent stake in the cannabis company. Part of the deal includes a gradual increase in the stake up to 55 percent over the next five years. Altria will also have the right to nominate four directors, including one independent director, to serve on Cronos Group’s Board of Directors. Altria’s investment will allow for Cronos Group to grow and develop at an accelerated rate. Altria will also provide Cronos Group with its expertise in regulatory affairs, compliance, and brand management, among other services.
“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” said Howard Willard, Altria’s Chairman and Chief Executive Officer. “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.”