Marlboro maker places $2.4B bet on Canadian marijuana company

08 December, 2018, 16:59 | Author: Brooke Harris
  • Cronos Group confirmed is in business with Marlboro maker Altria

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.

Altria will acquire 146.2 million Cronos shares at a price of CA$16.25 per share, representing a 41.5% premium to the 10-day average price ending November 30, the last unaffected trading day before Cronos publicly disclosed discussions with Altria.

"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. Constellation Brands Inc., maker of alcoholic beverages, has invested more than $5-billion for control of Canopy Growth Corp., while Molson Coors Brewing Co.is looking to create cannabis-infused beverages through a joint venture with Quebec's Hexo Corp.

Coca-Cola (KO) was rumored to be considering an investment in Canadian cannabis company Aurora (ACB).

"We believe an investment of this magnitude provides overall legitimacy to the industry as a whole and should represent a positive catalyst for the sector, with the news likely to drive valuations higher", said Canaccord Genuity analyst Matt Bottomley, who has a 12-month price target of $9 on Cronos's stock and a "hold" rating. It's a logical fit, because "big tobacco knows how to cultivate crop, knows how to deal with regulators, they are at the forefront of vaporization technology, and they also arguably have less reputational risk than other fast-moving consumer goods", he said.

Gorenstein said that Altria has "decades of experience in regulatory, government affairs, compliance, product development and brand management that we expect to leverage, particularly as new markets for cannabis open around the world". It also announced Friday that it will discontinue two of its next-generation tobacco products and its oral nicotine-containing ones to focus on "more compelling reduced-risk tobacco product opportunities".

Persona 5’s Joker is first Super Smash Bros. Ultimate DLC
Ultimate , teased that the downloadable characters for the forthcoming fighting game would be huge, he was not kidding. Ultimate is out today and, as our review revealed , is absolutely, well... smashing.

Altria shares rose as much as 3.2 percent to $56.14 on Friday. "I think it's worth noting that Altria doesn't grow their own tobacco".

Reports of an Altria-Cronos deal first surfaced earlier this week. We think that model of growing your own plants is very hard to scale and to execute well.

Altria will nominate four directors to an expanded seven-member Cronos board.

Canada voted earlier this year to legalise weed.

Cronos and other cannabis stocks have been thrust into the spotlight in the past few months following the legalization of recreational marijuana in Canada in October, as well as legalized recreational and medical pot in several USA states last month.

Prior to Friday's announcement, Cronos had confirmed reports that it was in talks with Altria. Left, making the big Canadian producers "more valuable for that reason".

Recommended:

  • Oklahoma QB Kyler Murray Receives Davey O’Brien Award

    Oklahoma QB Kyler Murray Receives Davey O’Brien Award

    The future pro baseball player was honored with the Davey O'Brien Award on Thursday night at the College Football Awards Show. Tagovailoa has thrown for 3,353 yards, 37 touchdowns to four interceptions and has completed almost 68 percent of his passes.
    PM Khan directs FO to prepare reply to Donald Trump's letter

    PM Khan directs FO to prepare reply to Donald Trump's letter

    Defending ties with Beijing, the PM said our relationship with China is not one-dimensional. He also denied accusations that his country was harbouring terrorists from the Taliban.
    Reports Jose Mourinho set to leave United 'totally untrue', says Jorge Mendes

    Reports Jose Mourinho set to leave United 'totally untrue', says Jorge Mendes

    Jose Mourinho admits Manchester United were more intense and faster with the ball without Paul Pogba in their midfield. One of the things have noticed in England is that there are no weak games in the Premier League.
  • Trump to name former Fox anchor Heather Nauert as next UN ambassador

    Trump to name former Fox anchor Heather Nauert as next UN ambassador

    She never traveled with and was not close to her first boss at the department, former Secretary of State Rex Tillerson. He said USA influence is at a "low ebb", partly because of the absence of empowered ambassadors under Trump .
    China confident on USA  trade pact, Trump cites Xi's 'strong signals'

    China confident on USA trade pact, Trump cites Xi's 'strong signals'

    China's ministry of foreign affairs said Monday the Chinese and USA president had agreed to work toward removing all tariffs. China has promised to act quickly on the agreement but failed to release details, rattling financial markets.
    Arsenal to speak to players involved in 'hippy crack' controversy

    Arsenal to speak to players involved in 'hippy crack' controversy

    It can make users feel euphoric and relaxed, with some reporting hallucinations, and can lead to loss of blood pressure, fainting and even heart attack .
  • Neti pot Seattle death: Doctors issue warning after brain infection ki

    But when Cobbs operated to remove the mass, "it was just dead brain tissue", making it hard to determine what it actually was. Balamuthia mandrillaris: As Gizmodo reported, there have only ever been 200 reported cases of B. mandrillaris globally.
    New Zealand beat Pakistan in third Test to win series

    New Zealand beat Pakistan in third Test to win series

    Nicholls took a sharp single to complete his third Test hundred and finished with 12 hits to the ropes during his 266-ball knock. Henry Nicholls was twice lucky to remain unbeaten on 20 off 54 deliveries at lunch on the fourth day in Abu Dhabi.
    Former Pirates Player Jose Castillo Killed In Crash In Venezuela

    Former Pirates Player Jose Castillo Killed In Crash In Venezuela

    Valbuena hit.226 with 114 home runs over 11 big league seasons with the Angels, Seattle, Cleveland, the Chicago Cubs and Houston. Carlos Rivero , who played briefly for the Diamondbacks in 2014 was driving the vehicle, but he survived the accident.
  • Watch SpaceX Launch Supplies to the ISS Astronauts

    Watch SpaceX Launch Supplies to the ISS Astronauts

    The cause of the rocket's spin, according to Musk , was a stalling out of one of the rocket's " grid fin hydraulic pump". The first stage engines were expected to shut down prior to stage separation two minutes and 23 seconds after liftoff.
    Huawei's Meng Wanzhou faces charges in Canadian court

    Huawei's Meng Wanzhou faces charges in Canadian court

    On Friday, there were reports that Tokyo appeared to be the latest country that plans to ban the purchase of Huawei products. Her arrest has drawn criticism from Russian Federation and China as an example of the United States' heavy-handed policies.
    What song is playing in the Mortal Kombat 11 trailer?

    What song is playing in the Mortal Kombat 11 trailer?

    According to the PlayStation description of the promo, the new games give users "unprecedented control to customise characters". Not a lot of details were given during the clever twist reveal, aside from a January 17 date for a community reveal.


Popular

Detectives searching for missing backpacker believe she was murdered
On Saturday police released images of her necklace and watch and urged anyone who recognised the items to come forward. Beard said "that property is going to be somewhere, the clothing is going to be somewhere, we haven't found it".

Milwaukee Bucks trading Matthew Dellavedova back to Cleveland Cavaliers
Hill was traded to Cleveland from the Utah Jazz at last year's trade deadline. The Cleveland Cavaliers continue to be proactive in their rebuild.

Man City not rattled by Liverpool pursuit, says Klopp
It was a normal situation which can happen - sometimes a striker expects a tackle and tries to avoid it by jumping. We don't want passion and emotion diluted".

Man coughs up massive blood clot shaped like bronchial tree
A man has died after coughing up part of his lung, according to a report in the New England Journal of Medicine . Wieselthaler called the occurrence "very, very, very rare".

Lakers! LeBron James wants more context before responding to Kevin Durant's remarks
It's not LeBron's fault at all; it's just the fact you have so many groupies in the media that love to hang on every word. Several players are interviewed about how playing with James can change everything from play style to media attention.

Hawaiian monk seal has eel removed from its nose
Once revealed the seal was in good health, social media users couldn't help but poke a little fun at the "rebel" sea creature. But the eel may have gotten deeper into the nose, preventing the seal from removing the invader.

Dollar weak as U.S. Treasury yield curve inversion sparks recession fears
Regardless of other possible reasons, "it is mainly indicative of worries about how long growth in the US can remain so strong". This has spooked some people, because an inversion in the yield curve is sometimes regarded as the harbinger of a recession.

Jennifer Aniston flaunts her pins in sparkly number at the premiere Dumplin
She then played us the whole soundtrack, and she would tell us how each song came about and what inspired her to write it. However, when Parton met Dolly at a dinner party at Aniston's house, she knew it was a sign of respect.

Trump Mulling Former US Attorney General Barr to Replace Jeff Sessions
At least one other contender who has received serious consideration from the White House, according to the person, is Rep. Barr shares at least one of the president's views on the probe being conducted by special counsel Robert S.

This country to have free public transport for all
As of this summer, anyone under the age of 20 can travel free in Luxembourg, while an annual "mPass" for commuters. Soon, all public transport in Luxembourg will be free as fares for trains, trams, and buses are lifted next summer.