Marlboro maker Altria Group Inc., which is headquartered in Richmond, Virginia, is paying $1.8 billion for a 45 percent stake in Cronos Group.
"The proceeds from Altria's investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in (research and development) and brands that resonate with our consumers", he continued.
Rapid growth in the cannabis market is expected to continue as legalization expands in the US and social norms change.
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"Altria's experience is very wide-ranging - not just in tobacco, but in adult beverages in different categories and decades of experience in how to bring different products to market", Cronos chief executive Michael Gorenstein said on call with analysts. Altria will also get warrants that will give the option to increase its stake to 55%.
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The Washington Wizards joined the trade as a third team and acquired Dekker from the Bucks for Jason Smith . He averaged 6.3 points and 3.7 rebounds but missed significant time with a severely sprained left ankle.
In June, British tobacco giant Imperial Brands was among investors taking a stake in Oxford Cannabinoid Technologies, a United Kingdom-based medical cannabis startup.
The investment comes a little more than a year after Corona beer distributor Constellation Brands announced that it would invest billions of dollars in Canopy Growth Corporation (NYSE: CGC).
Prior to Friday's announcement, Cronos had confirmed reports that it was in talks with Altria.
Altria agreed to acquire 146.2 million newly issued shares for C$16.25 each - a 16% premium from yesterday's close.
Altria's huge investment lit up shares of cannabis companies that have begun to set up shop in Canada, where recreational use was legalized nationwide this year. The decision by Altria to go ahead with an investment in Cronos shows that Altria is serious about investing in marijuana as a new growth area as sales of traditional cigarettes slow. It said the deal with Altria does not limit Cronos from any other partnerships.
Altria has been grappling with the steady decline of tobacco smoking rates and sees potential to tap into a new segment of growth as marijuana moves into the mainstream.