Altria Group In Talks With Cronos Regarding A Potential Investment

  • Dec 04, 2018 AEDT
  • Team Kalkine
Altria Group In Talks With Cronos Regarding A Potential Investment

As per the recent market news, it has been speculated that Altria Group which is the owner of companies like Philip Morris USA, John Middleton Co and many other companies which are involved in the manufacturing of smokable products, smokeless products, and wine, may acquire Canadian cannabis producer Cronos.

Cronos, a globally diversified and vertically integrated cannabis company, has confirmed that it is involved in discussions regarding a potential investment by Altria Group Inc. (NYSE: MO) in Cronos Group (NYSE: CRON). However, as of now, no agreement has been made regarding any such transaction and there is no surety that these discussions will lead to an investment. Following the release of this news, the share price of Cronos increased by 11.15 percent on NYSE as on 3 December 2018. Meanwhile, the share price of Altria Group also witnessed some improvement with share uplifting by 1.64 percent on NYSE as on 3 December 2018.

This is not the first time we are hearing about a big company trying to get to its foot in cannabis Industry. Earlier the largest beverage company Coca Cola was also in news, when there were talks of it joining hand with Canada’s Aurora Cannabis for the creation of cannabis-infused beverage, however, the talks ended in October 2018 and there has been no progress on this matter ever since.

The global cannabis industry has been evolving rapidly and it has witnessed some explosive and drastic growth in recent times. Further, there have been many recent positive developments in the medical research of cannabis and cannabis treatment due to which the future of the cannabis industry is looking very positive.  Recently, Canada also legalized the recreational use of cannabis nationwide which is why many Canadian cannabis companies are looking very attractive to large companies situated in different countries which are intending to either buy these cannabis companies or to make an investment in these company.

Creso Pharma Ltd. (ASX: CPH), which is listed on Australian stock exchange (ASX) and is involved in the operations of developing medical cannabis products, successfully expanded its business into the Canadian market through the acquisition of Mernova Medicinal Inc, for a total of A$10.2 million.  Creso Pharma is the only company listed on the ASX that owns a cannabis facility in Canada and recently it welcomed the decision of Canadian Prime Minister of making Canada the second country in the world and the first G7 nation to legalize the recreational use of cannabis nationwide. In the month February, the company finalized its acquisition of Nova-Scota based medical cannabis producer Mernova Medical and the company has also decided to dual list and expand its investor base into North America Market. Meanwhile, the share prices of Creso Pharma have fallen by 41.78 percent as on 3 December 2018. Creso’s shares uplifted by 3.529 percent as on 4 December 2018 (1:15 PM).

With many positive developments, the cannabis space is expected to witness a heightened level of activities in the near future and many M&As may be seen rolling in given the emerging potential.


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