Philip Morris May Enter Marijuana Business

While Philip Morris International has stayed relatively out of the cannabis market in recent years, recent statements from its CEO, Andre Calantzopoulos, could hint at a shift in the company's strategy.[1]This change continues to demonstrate the tobacco industry's growing interest in marijuana, which is increasingly seen as a profitable sector by cigarette companies.

Until now, the tobacco giant had shown some reluctance to enter the cannabis market. Five years ago, Philip Morris International invested in Syqe Medical, an Israeli company specializing in medical cannabis, but not related to recreational cannabis.[2].

"We will determine the way forward"

In an interview with Bloomberg LP, Andre Calantzopoulos said he is now keeping a close eye on the nascent cannabis industry. However, there are major uncertainties hanging over the marijuana sector, particularly because of its relative youth and the regulatory barriers that still exist. According to the CEO of Philip Morris International, the company's entry into cannabis, if it happens, would be limited to smokeless products, like the new tobacco-free products the firm is developing.

Marijuana increasingly invested by cigarette manufacturers

This statement seems to confirm the tobacco industry's growing interest in cannabis. In March 2021, the British American Tobacco company announced a investment of 147 million euros, in order to take control of nearly 20% of the shares of the Canadian company Organigram, specialized in therapeutic and recreational cannabis. Similarly, the Altria group, which sells Marlboro cigarettes in the United States, had already invested in 2018 $1.8 billion in another Canadian company, Cronos Group, dedicated to the marketing of therapeutic cannabis. The increase in investments suggests that the tobacco industry, faced with declining cigarette sales, is now looking for ways out to ensure its economic survival.

Tobacco industry lobbying to remove regulatory barriers

While doubts remain over how regulatory barriers will evolve, the tobacco industry is lobbying to ease cannabis laws, the effects of which are starting to be felt. In early 2021, new Senate Majority Leader Chuck Summer indicated that legalizing cannabis was now a “priority” for Congress, while New York Governor Andrew Cuomo signed a bill legalizing recreational marijuana, opening up a potentially colossal market for industry players.

[1] New York Post, Marlboro maker Philip Morris is eyeing the pot market, CEO says, 04/28/2021, (accessed 05/05/2021)

[2] Bloomberg, Marlboro-Maker Philip Morris Keeps Cannabis Options Open, 04/28/2021, (accessed 05/05/2021)