One of the world’s biggest tobacco companies is bullish on bud.
Altria, parent company of New York-based Philip Morris and maker of Marlboro cigarettes, invested $2.4 billion into a Toronto medical and recreational marijuana company.
The deal gives Altria a 45 percent stake in Cronos Group.
Cronos said Friday that the Richmond, Virginia, tobacco company will pay another $1.4 billion for warrants that, if exercised, would give Altria a 55 percent majority ownership stake.
Cronos confirmed that it was in talks with Altria this week.
Cronos Group’s chairman, president and CEO Mike Gorenstein praised the deal in a prepared statement:
Howard Willard, Altria’s chairman and CEO said investing in Cronos underscores the company’s interest in an emerging market and represents a new growth opportunity for Altria.
“We believe that Cronos Group’s excellent management team has built capabilities necessary to compete globally, and we look forward to helping Cronos Group realize its significant growth potential,” he said.
Altria’s wholly-owned subsidiaries include Philip Morris USA Inc., U.S. Smokeless Tobacco Company LLC, John Middleton Co., Sherman Group Holdings LLC. The company also holds an equity investment in beer giant Anheuser-Busch InBev SA/NV (NYSE: BUD).