DEC 05, 2018 12:27 PM PST

Is Big Tobacco Going to Take Over Big Marijuana?

WRITTEN BY: Amy Loriaux

It was just a matter of time. Like all industries, the big fish like to eat the smaller fish. And a burgeoning market space, very similar to your own, is a really good catch. Well, that just may be the fate of cannabis. In a recent article published in Forbes, it was reported that the tobacco company Altria (makers of Marlboro Brand Cigarettes) is eyeing a large Canadian cannabis company Chronis Group, with possible plans to invest, or even acquire, the cannabis firm.  

Photo Source: unsplash.com

Altria has been suffering from low cigarette sales for a while now, which is no surprise, given the accepted fact that cigarettes can kill you. In attempts to diversify, Altria initially had its eyes set on acquiring the e-cigarette manufacturer Juul, according to CNN. However, with Juul facing a class-action lawsuit for marketing to minors, that may not go as well as planned. Nevertheless, rumors of the Chronis acquisition launched an increase in stock prices by 25%. The market is apparently ready to diversify.

Cigarette companies are not the only ones looking into cannabis firms to create new (and presumably profitable) products. Coca-cola apparently was interested in the possibility of CBD-infused beverages, but their CEO recently announced that they were no longer interested. No matter, there are plenty of other beverage companies in the sea. Pepsi has claimed that the option to introduce CBD-infused "wellness drinks" was still on the table. Alcohol companies have already begun the process of investing in cannabis companies, as this newsletter recently discussed. The Canadian subsidiary of Molson Coors has a joint venture with The Hydropothecary Corporation to produce cannabis-infused drinks for the Canadian market. UK alcoholic beverage giant Diageo also could be interested in cannabis.

Photo Source: UnSplash.com

Big Tobacco has actually been in the "vaping" business for a while now (unsurprisingly). But instead of e-liquid (nicotine suspended in various mediums such as propylene glycol), they are following the new vaping technology business. They have shifted their focus from e-cigarettes to "heated tobacco" or "dry-vapes", which heat the plant substance at a lower temperature to induce the vaporization of the active ingredient, nicotine. IQOS, from Philip Morris International, is the best-known product marketed for dry-vaping tobacco.

Big Tobacco has read the writing on the walls. They are looking towards the future which appears to be full of e-cigarettes, dry herb vaporizers, legal marijuana, and CBD-infused everything. But does this spell the death of a blooming young industry? If you're Kevin Sabet, Smart Approaches to Marijuana (SAM)'s legalization opponent, the marijuana industry's future is bleak if Big Tobacco moves in. Sabet points out that tobacco was "relatively harmless" before cigarettes were invented. Then the "nefarious" cigarette companies added nicotine and formaldehyde to ruin the natural goodness of the plant. This may be a bit overkill (as well as false), however, Sabet fears that marijuana will follow the same route which will lead to the end of "harmless cannabis consumption". 

Sources: Forbes.com, The Washington Post, CNNBusiness, Labroots.com, Quora.com, MaximumYield.com, wikileaf.com

About the Author
  • I currently work at a small CRO involved in clinical trial management.
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