Cannabis market in the sights of the tobacco industry

Tobacco company Altria, which markets the Marlboro brand in the United States, has recently shown interest in the cannabis market, which could be an avenue of development for an industry lacking solutions.[1].

Altria had already caused a sensation in 2019, by purchasing 45% of the shares of the Cronos group, a Canadian company listed on the stock exchange, which markets therapeutic and recreational cannabis, and wishes to " building a portfolio of iconic brands " globally. The marijuana market, anticipated by Altria as a " emerging sector at global level ", was also an opportunity for the firm to invest in products " complementary " to those of tobacco[2].

This desire for diversification was notably reflected in the filing in February 2020 of two patents for vaporizers designed for the consumption of cannabis. These devices allow the consumer in particular to vaporize THC or CBD, the two cannabinoids known from marijuana.

Investments so far unsuccessful

While the tobacco market is down overall, the cannabis sector is not Altria’s first business venture. Juul, the world’s leading e-cigarette brand, lost nearly $70% of its value just one year after the tobacco company invested $12.8 billion in the company.[3]. Similarly, as the magazine mentions Forbes, Altria's investment in the cannabis market suffered like most investors in the sector, losing about a third of its initial value.

An uncertain economic horizon

Despite the colossal sums invested, the prospects for development are currently hypothetical. With the ban on interstate banking and commercial transactions, the American federal regulatory framework still constitutes a considerable obstacle to the development of this market. Furthermore, the interest of the tobacco industry in the cannabis sector acts as a real deterrent, and serves as a scarecrow for opponents of legalization, who are reluctant to entrust the cannabis industry to the companies responsible for the industrial nicotine epidemic.

Keywords: Cannabis, Altria

©Tobacco Free Generation

[1] Tobacco Giant Altria Is Securing Technology In New Frontier: Marijuana, Forbes, 02/10/2020, consulted on 05/10/2020

[2] American cigarette maker Altria invests heavily in cannabis, Le Figaro, December 7, 2018, consulted on 10/05/2020

[3] Juul, the investment that was supposed to save Altria, goes up in smoke, January 30, 2020, consulted on 10/05/2020

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