On December 5th there was much talk around a company known as Altria. Altria is the parent company of a popular cigarette manufacturer by the name of Philip Morris that is most popular for their Marlboro brand of cigarettes. While the sales of cigarettes and other tobacco products offered through Altria and their entities sit stagnantly, the cannabis industry is burgeoning into a multibillion-dollar sector.
A few days ago, there was much speculation that Altria could be investing in a Canadian cannabis cultivation company by the name of CronosGroup. Today we are here to let you know that this investment has occurred. As of this morning, Altria has made a $1.8 billion investment into the Cronos Group. This gives Altria a 45% stake in Cronos Group, and they will also have the option to increase that by 10 more percent over the next five years.
Green is Leading the Way
So why would a tobacco conglomerate company such as Altria be eyeing the cannabis industry? It could quite possibly be because the stock of Altria fell almost 25% this year and their annual revenue growth report is predicted to show only a 1% growth this year as well as for 2019.
According to Altria CEO Howard Willard “Investing into Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria.”It seems that their investment had an immediate return as shares of Altria rose nearly 2% after this announcement in early trading on Friday and stocks for Cronos Group elevated more than 30% after this announcement.
According to the CEO of Cronos Group Mike Gorenstein, “Altria is the ideal partner for Cronos Group providing the resources and expertise we need to meaningfully accelerate our strategic growth.” The investment from Altria into Cronos is reportedly going to be used to expand the distribution and infrastructure Cronos Group has around the world as well as help to boost their investment into research and development of new products and brands in the cannabis space.