Marlboro Parent Company May be Entering Marijuana Market

For years, cannabis conspiracy theorists floated images of packs of Marlboro brand joints to illustrate the extent that corporations could conquer the marijuana industry once the drug was legalized. With Monday’s announcement by Reuters that Marlboro and Virginia Slims’ parent company Altria is discussing investment opportunities with Canadian cannabis firm Cronos Group, those alarmist tactics have become a reasonable approximation of the future of pot consumption.

“This is so meaningful because we just think this gets the ball rolling,” Michael Gorenstein, CEO and chairperson of Cronos Group, told CNN. While Cronos has copped to the fact that it is in talks with the tobacco giant’s corporation, it gave no indication that an Altria collaboration is a done deal. Nonetheless, its stock ended up rising 11 percent by Monday’s end.

Altria has not yet commented on its interest in Cronos. But there is little mystery surrounding the reasons why it would be looking to expand into the Canadian cannabis market. The company’s shares have fallen 20 percent during 2018. This is largely due to a wide-spread drop in cigarette usage. In the United States, recent studies suggest that adults are smoking fewer cigarettes than ever before—daily cigarette smokers have fallen by 15.5 percent since 2016 alone.

Cannabis is not the only savior to which the tobacco market is turning. Last week, the Wall Street Journal broke the news that Altria is also looking to acquire “a significant minority stake” in prosperous e-cigarette company Juul. Daily e-cigarette users are on the rise in the United States—2.8 percent of the total population, according to some studies.

Not all of Altria’s peers are convinced that pot is the way to go. Philip Morris CEO Andre Calantzopoulos cited his reluctance to diversify to the fact that his corporation operates in many markets where the drug is still prohibited. After all, what would Drug War-propagating Rodrigo Duterte think of such a move? “We know the positions of the president—and, you know, we have 70 percent market share in the Philippines,” Calantzopoulous told Bloomberg this week. “I can only imagine if we were called and asked, in a hypothetical case, ‘what are you people doing?’”

Altria seems ready to field those calls, and has some very profitable reasons to do so. Marijuana Business Daily estimates that there is currently a $52.5 billion demand for marijuana in the United States. Canada is the world’s largest national market for legal weed, and Cronos recently built a location there that can produce up to 40,000 kilograms of cannabis on an annual basis. The Canadian company has focused on bolstering its technological capacities to make a long-term market leader, and has even launched a project with Boston’s Ginkgo Bioworks to develop artificial cannabinoids.

Marlboro’s parent company is far from the only large corporation that seems to be placing its bets on the green. Molson Coors, Walmart, Pepsi, and Coca Cola are all household names that have publicly flirted with the possibility of creating cannabis products. The message is clear: Corporate cannabis is no longer the stuff of supposition, but rather a rapidly encroaching reality.