New partnership in medical cannabis for cigarette maker Philip Morris

Through its subsidiary Vectura Fertin Pharma, cigarette maker Philip Morris International (PMI) has announced a partnership with Avicanna Inc, a Canadian biopharmaceutical company specializing in cannabinoid-based products. The collaboration, highlighted in a recent press release joint press release, officially aims to advance medical cannabis research and improve patient access to therapeutic cannabis products in Canada [1].

To cope with the decline in tobacco consumption, tobacco manufacturers are diversifying their investments to develop new markets and exploring the possibilities offered by the flourishing cannabis market.

Philip Morris's calculated diversification to improve its image

For over a decade, Philip Morris has been developing a strategy focused on its "smokeless transformation", notably through the launch of its flagship product, IQOS, a heated tobacco device. At the same time, the company is diversifying its activities with significant investments in sectors such as the pharmaceutical industry and medical cannabis. In August 2021, PMI acquired Vectura, a laboratory specializing in the treatment of respiratory diseases such as asthma and COPD, for €1.3 billion, sparking a strong controversy among public health professionals, as asthma diseases and especially COPD were essentially linked to the consumption of tobacco products.

At the same time, the tobacco company acquired Oti-Topic, a US inhaler company, as well as Fertin Pharma, which specializes in nicotine replacement therapy. According to Philip Morris, the integration of Fertin Pharma aims to develop new botanical products and "personal wellness solutions."

The acquisitions reflect a diversification strategy aimed at strengthening the company's narrative about reducing the risks associated with its tobacco and nicotine products. By seeking to reposition itself as a "health company," Philip Morris hopes to present itself as a solutions company, and thus improve its image among policymakers. In doing so, the tobacco company's strategy is also to seek to divide health players.

Tobacco Industry's Interest in Cannabis Sector

Other major tobacco companies, such as Imperial Brands and British American Tobacco, have also entered the cannabis sector. In the 1990s, the tobacco industry actively sought to disassociate tobacco from the drug image, often highlighting cannabis as the real problem substance. Today, there has been a complete reversal of this official stance, marked by a radical change in their positioning.

Imperial Brands, for example, invested in Oxford Cannabinoid Technologies, a UK-based cannabis research and development group, in March 2019. British American Tobacco has invested millions of dollars in recreational cannabis companies, particularly in Canada. In 2021, the company partnered with Organigram, a Canadian cannabis producer, buying a 19.9 % stake for $176 million. Meanwhile, Philip Morris International acquired Syqe Medical, a developer of cannabis inhalation devices, for $650 million.[2]In March 2019, Altria (a subsidiary of PMI) also acquired a 41,133-per-cent stake in Cronos Group, a cannabis-based product research and development group.[3].

The tobacco industry’s expansion into the cannabis sector is driven by several underlying factors. The decline in global tobacco sales, influenced by stricter regulations, including through the WHO Framework Convention on Tobacco Control, has pushed these companies to seek alternative revenue streams. Cannabis offers a promising opportunity, particularly as legalization expands and consumer interest increases. In addition, tobacco companies’ expertise in large-scale agricultural production, product development, and distribution networks positions them well to influence the cannabis market. The co-use of tobacco and cannabis among some consumers provides an additional entry point for these companies.

A new marketing opportunity for the tobacco industry

The involvement of tobacco companies in the cannabis industry raises public health concerns. The health risks associated with the use of both tobacco and cannabis products are well established. One issue is the potential normalization of these products, particularly dual use, where individuals use both tobacco and cannabis. This could undermine efforts to reduce smoking rates. Studies have shown that dual use of tobacco and cannabis can further amplify health risks, such as respiratory problems and addiction.

The changing regulatory landscape for cannabis also has the potential to create loopholes for large companies to exert undue influence and circumvent existing safeguards. For example, the lack of standardized regulations prohibiting advertising of cannabis products in some regions has opened the door to aggressive marketing tactics targeting certain segments of the population that echo those historically employed by the tobacco industry.

AE

[1] Javier Hasse, World's Largest Tobacco Company Continues Silent Entry Into Cannabis: Is Philip Morris A Medical Marijuana Supporter?, Forbes, published January 19, 2025, accessed January 22, 2024

[2] Tobacco-free generation, Philip Morris acquires cannabis inhaler developer Syqe Medical for $1.45 billion, published July 24, 2023, accessed January 22, 2024

[3] The link between cannabis and tobacco, Truth Initiative, published September 28, 2023, accessed January 22, 2024