Marlboro Manufacturer Makes Major Investment in Cannabis
Philip Morris International (PMI), one of the world’s largest tobacco companies and the producer of well-known cigarette brands like Marlboro and Parliament, is planning to invest $770 million (69.8 billion rubles) in the cannabis industry.
Tobacco Giant to Acquire Israeli Cannabis Firm
PMI has reached an agreement with the Israeli company Syqe, which has developed an inhaler for medical cannabis use designed to help manage chronic pain. According to the deal, PMI will transfer $120 million (10.9 billion rubles) to Syqe to help the company obtain approval to sell its inhaler in the United States. If successful, PMI has committed to purchasing all of Syqe’s shares for $650 million (58.9 billion rubles).
The SyqeAir Inhaler
In 2022, PMI’s revenue dropped by 1.8% to $80.7 billion (7.3 trillion rubles), mainly due to declining cigarette demand. As a result, the company is seeking to profit from non-nicotine and non-tobacco products, which accounted for over a third of its income last year. PMI experts estimate that the global medical cannabis market reached $24 billion (2.2 trillion rubles) in 2022 and is expected to grow by an average of 15% per year through 2030. This makes investments in the cannabis sector highly promising for future dividends.
Israel Poised to Become a Leading Cannabis Producer
Currently, total investments in Syqe are estimated at just $80 million (7.2 billion rubles). Therefore, PMI’s $120 million investment will play a significant role in the company’s growth. If PMI acquires Syqe for $650 million, Syqe will rank among the top 15 cannabis companies by market capitalization. The current leader is GW Pharmaceuticals, the maker of cannabinoid-based drugs Epidiolex and Sativex, with a market cap of $6.8 billion (616 billion rubles).
GW Pharmaceuticals’ Cannabis Farm
Because cannabis smoke contains toxic substances, smoking is not considered the best method for consuming medical cannabis. The SyqeAir inhaler helps protect patients from harmful carcinogens and other toxins, while also allowing for precise dosing of cannabinoids. However, due to a limited market, only about 50,000 people currently use these devices. If Syqe receives approval to sell its inhaler in the U.S., the number of users could increase significantly, leading to much higher profits for the company.