Cigarette maker Altria Group Inc. is in talks with Canadian cannabis producer Cronos Group about a possible investment in the latter, Cronos said on Monday. However, no decision has been reached yet on any transaction, according to Cronos. The announcement comes shortly after some reports in the media cited anonymous sources in suggesting that Altria might want to acquire Cronos.
With Canada’s legalization of recreational use of marijuana, the Canadian cannabis industry is seeming to emerge as a lucrative opportunity for companies/investors. U.S. beverage company Constellation Brands Inc., for example, announced a $3.8 billion investment in Canada’s cannabis company Canopy Growth Corp. in August.
With a declining trend in cigarette smoking among U.S. consumers, Altria might be looking at options to diversify its business, and the cannabis space could potentially be one of the options. Also, Altria has been investing in e-cigarettes in recent years through its Nu Mark subsidiary. The company is reportedly in talks to take a minority stake in e-cigarette maker Juul Labs Inc, according to a Wall Street Journal report citing anonymous sources.