The owner of legendary Marlboro cigarette company, Altria, is reportedly in takeover talks with Canadian cannabis maker Cronos as slowing cigarette sales are pushing the Virginia-based firm to seek new business opportunities.
“No agreement has been reached with respect to any such transaction and there can be no assurance such discussions will lead to an investment or other transaction involving the companies,” MarketWatch cites the Canadian marijuana company’s press office.
Cronos stock surged as much as 30 percent on the news to close at $10.74 per share, pushing the company’s market cap to nearly $2 billion.
Altria, one of the world’s biggest producers and marketers of tobacco, cigarettes and related products, is reportedly looking to diversify its business beyond traditional smokers. Last month, the Wall Street Journal reported that the owner of Marlboro was negotiating the acquisition of a share in electronic cigarette start-up JUUL.
In late June, the Canadian government approved the legalization of recreational marijuana in the country. Canada is seen as a testing ground for marihuana businesses that are looking to expand globally after other nations follow suit.
Several US states have legalized recreational and medical pot so far. The US Congress may reportedly pass the Farm Bill that will allow to legally produce hemp. The move may open the door for some other marijuana-related goods, containing cannabidiol, a popular natural remedy used for many common ailments.
Cooperation between Altria, the parent company of Philip Morris, and the Canadian firm may potentially mark one of the biggest collaborations involving a mainstream tobacco firm and the booming but volatile pot industry.