British American Tobacco (BAT) is set to buy a near 20% stake in Canadian licensed producer Organigram for about $175.81 million, CNBC reports. The move comes less than a month after the company’s Chief Marketing Officer Kingsley Wheaton called CBD “an exciting growth area” for the company’s “business for the future.”
The investment makes BAT Organigram’s largest shareholder.
In a statement to CNBC, BAT said Organigram “has a proven track record of consumer-led innovation and developing high quality adult-use recreational and medical cannabis products, which are legally available in Canada.” The world’s second-largest tobacco company will be able to appoint two directors to Organigram’s board.
Both BAT and Organigram will contribute scientists, researchers, and product developers to a Center of Excellence, which will be established at Organigram’s New Brunswick facility, BAT said in the report. BAT will also have access to research and development technologies, product innovation, and cannabis expertise.
BAT’s brands include American Spirit, Camel, Pall Mall, Rothman’s, Newport, Lucky Strike, Kent, and Dunhill cigarettes, oral tobacco brands Camel Snus and Grizzly, and vape and non-combustible brands Vuse, Vype, Glo, and Velo. Earlier this year it launched a pilot CBD vape product in Manchester, England.
In January, the world’s third-largest tobacco company, Altria Group, registered in Virginia to lobby on cannabis policy. Last year, it hired Denver, Colorado-based Brownstein Hyatt Farber Shreck, one of the nation’s top cannabis and hemp law firms, to lobby Congress on federal policies related to CBD and “non-tobacco excise taxes.” Altria owns 45% of Canadian licensed producer Cronos Group after investing $1.8 billion in the company in 2018. It also filed for two cannabis vaporizer technology patents in 2020.
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