A tobacco giant hashes out a deal with a cannabis company

THOSE WHO fret about America’s health must have rejoiced in November when the Centres for Disease Control and Prevention, a federal agency, announced that smoking rates had fallen to their lowest in recorded history. Just 14% of American adults smoked cigarettes in 2017, compared with around 42% in 1965. The trend is a boon for the public’s health but for tobacco companies it raises existential questions.

On December 7th Altria, a tobacco giant which sells Marlboro in America, pointed to a possible solution. It announced that it was spending $1.8bn to buy a 45% share in Cronos Group, a Canadian cannabis firm, with an option to purchase a further 10% in the future. The news boosted Cronos’ share price by 29%; Altria’s crept up by 2%.

As demand for cigarettes has fizzled, Altria has increased its prices and cut costs to try to drive profits. A move into cannabis, which was recently legalised in Canada, is...



via Business Feeds

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