It has long been expected that big tobacco would want to get into the cannabis business. The legal status in the U.S. has been the one thing holding back tobacco companies. While it hasn’t seemed to matter to alcohol brands, tobacco has mostly remained on the fringes until today’s report from The Globe and Mail.
The Canadian publication reported that Altria (MO), which is the maker of Marlboro cigarettes was considering an equity stake in Aphria (APHQF). However, the story source cautioned that a deal could take time to reach and that it could possibly end up not occurring. The Globe’s source said that the leadership teams from Altria and Aphria have met on several occasions and most recently on Monday. It is rumored that Altria would start with a minority stake and then ultimately push it to a majority stake.
Aphria issued a statement saying, “That there is no agreement, understanding or arrangement in place with a potential investor at this time” and then added, “Aphria will advise the investment community of any material changes, if and when they occur, in accordance with applicable disclosure requirements.”
Aphria is a leading global cannabis company headquartered in Leamington, Ontario – the greenhouse capital of Canada. The company is known for its low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible. Aphria has strategic partnerships with a presence in more than 10 countries across 5 continents.
Aphria stock jumped over 14% on Wednesday to lately trade at $15.30 on the OTC Markets. This is lower than its 52-week high of $19.86. Altria stock fell slightly during the day and closed down 19 cents to $62.91.
Traditional beverage brands have also been eyeing cannabis. Constellation Brands (STZ) made an almost $5 billion investment into Canopy Growth not long ago. Last week. Molson Coors (TAP) agreed to a joint venture with The Hydropothecary Corp. or Hexo (HEXO) to develop non-alcoholic cannabis drinks.