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Farmers Get Onboard With the Marlboro of Marijuana

Marlboro of Marijuana Is Officially On Its Way
PHOTO William Warby

Economics

Farmers Get Onboard With the Marlboro of Marijuana

Big Cannabis here we come?

If ever there were a big bad wolf destined to come crawling into the cannabis scene and lay down a savage ruckus, it would be the tobacco industry. For the past several decades, pot advocates have feared, speculated and even spread conspiracy theories about the day when Big Tobacco would take a serious interest in their sweet leaf and turn the plant into a monster of modern-day commerce.

Well, it seems that time has come. Tobacco giant Altria recently invested a whopping $1.8 billion in the Canadian cannabis company Cronos Group to combat a decline in cigarette sales. The maker of Marlboro cigarettes is about to go deep inside the legal cannabis trade and quite possibly lay the foundation to become one of the most dominant forces in the global industry within the next few years.

Early last week, rumors began to spin from the media suggesting that Altria, the parent company of Philip Morris USA, was looking to straight-up buy Chronos in its bid to enter the world of cannabis. Reuters reported the company was looking to acquire the Canadian pot producer as a means to diversify and expand its market share.

At first, news of the purported deal seemed to be spawned from the same swill mill as other supposed collisions of cannabis interchange. Cronos even came out after the report first surfaced, saying that it was, in fact, “engaged in discussion concerning a potential investment,” but also discounted the idea that an agreement had been reached. Industry sources close to the commotion said that these types of explorations of opportunity between cannabis and tobacco were happening all over the place.

Two days later, the Altria-Chronos deal was official – the Marlboro of Marijuana was born.

“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” said Howard Willard, Altria’s CEO, in a statement.

Now, for those cannabis purists concerned that this progress is perhaps the first big move contributing to destruction of weed as medicine, it is worth mentioning that this union is only happening because the arms of the cannabis trade are wide open. Chronos CEO Mike Goldstein said on the heels of the announcement that “Altria is the ideal partner… providing the resources and expertise we need to meaningfully accelerate our strategic growth.” Translated to real talk, this means Altria has the resources to ensure Chronos is positioned to be the king of legal cannabis once the United States government finally decides to end pot prohibition once and for all.

This could lead to more tobacco growers in the U.S. and Canada moving to marijuana soon, according to a report from Bloomberg.

“It’s certainly helpful that Altria already has a relationship with local contract farmers,” Gorenstein told the news source. “We can help those farmers transition immediately into cannabis cultivation.”

It is predicted that industrial hemp could be the catalyst to shifting more American farmers to the legal marijuana circuit. The latest version of the Farm Bill, which includes a provision to legalize hemp nationwide, could be pushed through before the end of the year. This would allow more farmers, some of which deal in tobacco production, to easily slide right over to the cannabis sector without much effort at all.

Even those that have relied on traditional cash crops like corn and soybeans have expressed an interest in adding industrial hemp to their acreage. Thus it seems getting the agricultural sector on board with legal weed once the U.S. joins in is not likely to be an excruciating affair. In Canada, where marijuana has been fully licensed since October, the transition is already happening.

“We have spoken to farmers who are absolutely willing to make that switch,” CannaTrust Holdings CEO Peter Aceto told Bloomberg.

Interestingly, however, the so-called Marlboro of Marijuana is not likely to become the product that most people might imagine – a pack of Marlboro cigarettes branded with a pot leaf. It is more feasible that the connection between Big Tobacco and legal weed will lead to the development of products geared toward the health-conscious consumer.

Smoking is at an all-time low, according to federal statistics. And Altria stocks have dropped by more than 20 percent over the past year due to a lack of consumer interest. Other tobacco companies that are dabbling in the marijuana sector have invested in delivery devices for cannabis users who do not want to smoke it.

TELL US, how do you feel about tobacco companies entering the cannabis industry?

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