Philip Morris Announces Plans to Enter the Global Cannabis Market
Last week, during an interview with Bloomberg News, the CEO of tobacco giant Philip Morris, André Calantzopoulos, stated that the company is considering entering the global legal cannabis market as part of its production diversification strategy.
“In light of the ongoing global decline in demand for tobacco and related products over the past 10 years, we are exploring various options to expand our business interests, including the possibility of entering regional legal cannabis markets,” Mr. Calantzopoulos said in the interview. “We are interested in the potential production of cannabinoid extracts, as well as other types of products containing active cannabis compounds that do not involve smoke or vapor when consumed.”
It’s worth noting that Philip Morris has previously shown interest in investing in the legal cannabis market. For example, about five years ago, the corporation invested $20 million in the Israeli company Syqe Medical, which develops automated inhalers for microdosing therapeutic cannabinoids, hoping to secure rights to produce and distribute this promising product. At the time, the company was formally interested in adapting the technology for the production of “safe” and smokeless nicotine inhalers. However, following the recent approval of the device for use in Canada, Philip Morris has expressed interest in acquiring the rights to distribute the device in its original form.
Meanwhile, other major tobacco companies are also actively investing in regional legal cannabis markets, hoping to strengthen their positions in this promising and rapidly expanding industry. In 2018, tobacco company Altria, known for producing Marlboro cigarettes, paid $1.8 billion for a 45% controlling stake in the major Canadian cannabis company Cronos, effectively becoming its owner. Since then, the company has filed for two patents related to the production of cannabinoid extracts and has hired a team of lobbyists to actively negotiate with the U.S. Congress about the possible legalization and regulation of CBD-containing medicines at the national level.
Additionally, in early March of this year, British American Tobacco, which owns brands such as American Spirit, Camel, and Newport, among many other popular cigarette brands, acquired a 20% stake in another major Canadian cannabis company, Organigram, as part of its production diversification policy. After spending about $175 million, the corporation became the majority shareholder and officially announced its focus on developing new international markets for the sale of therapeutic, CBD-containing products.
Of course, the actions of these tobacco giants have not gone unnoticed by politicians and activists, who have already begun organizing resistance to the potential monopolization of the cannabis market by large corporations. For example, about a month ago, Senator Chuck Schumer, the leader of the Democratic Party in the U.S. Senate, proposed including special provisions in a prospective national cannabis legalization bill that would prevent large tobacco and alcohol companies from directly investing in cannabis businesses, aiming to avoid the creation of monopolies in this market.