Tobacco titan Philip Morris International Inc. (NYSE: PM), the maker of Marlboro cigarettes, is poised to spend up to $650 million on an Israeli cannabis company that specializes in metered-dose inhalers for pain management.
According to the Israeli publication Calcalist, the deal will proceed in stages, with the first being a $120 million investment by Philip Morris in Syqe Medical, which it already backed with a $20 million investment in 2016.
If that money is enough to get Syqe through clinical trials and the company gets approval from the U.S. Food and Drug Administration, Philip Morris has committed to purchasing all of the company’s shares for $650 million, Calcalist reported.
The deal will be solidified by Philip Morris subsidiary Vectura, and if the acquisition closes, it’s expected to transform Syqe into one of the largest marijuana companies in the world.
Syqe inhalers are so far available only in Australia and Israel. The product was approved in Canada two years ago but appears not to have made it to market, MJBizDaily reported.
The move is an unsurprising one for Philip Morris, given that the company has said for years that it’s been analyzing business opportunities in the marijuana space.
It’s also nowhere near the first large tobacco company to explore cannabis options. Altria Group Inc. (NYSE: MO) dove into marijuana in 2018 with a $1.8 billion investment into Canadian company Cronos Group, and British tobacco company Imperial Brands invested $93.4 million in Auxly Cannabis Group, another Canadian business.