In an effort to expand on sales while trapped in a stagnant cigarette and tobacco industry, Marlboro owner Altria is investing nearly $2 billion in Cronos — a cannabis company.
The investment will give Altria a 45% stake in the Canadian company with an option to increase to 55% over the next five years, CNN reported. The cash injection proves that Altria is serious about marijuana investment opportunities and believes it will be the next big thing after people, presumably, ditch cigarettes all together.
“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” the company’s CEO, Howard Willard, said in a statement.
Shares of Altria rose by 2% after news of the investment dropped on Friday. Cronos soared up over 30%.
“Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth,” Cronos CEO Mike Gorenstein said in a statement.
With the extra money, Cronos plans to expand its distribution and infrastructure around the world while boosting investments in research and development for new brands and products, according to CNN.
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