Tobacco giant Altira is investing $1.8 billion in Canadian cannabis company Cronos Group. That will give Altria a 45% stake in the company, with an option for Altria to increase its stake to 55% over the next five years.
Reports of an Altria-Cronos deal first surfaced earlier this week. 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.
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 US states last month.
Many alcoholic beverage, tobacco and other consumer products companies may want to bet on cannabis.
Coca-Cola (was rumored to be considering an investment in Canadian cannabis company Aurora .
But Coke shot down the talk in October. CEO James Quincey said the company "doesn"t have any plans at this stage" to enter the CBD market.