In the 19th century, the tobacco industry was the largest in the world. By the 1990s, though, tobacco use had been significantly reduced, and it looked like the industry would be facing extinction. The future seemed bleak, but then in 1997, a man named Jeffrey R. Satinover appeared on CNN with an innovative idea: put marijuana in cigarettes.

We hear it all the time – that cannabis is the next big thing. From the advent of legal medical marijuana in states like California, to the rescheduling of cannabis by the U.S. Drug Enforcement Agency, to the legalization of recreational pot in Colorado, Oregon, Washington and Alaska – cannabis is set to dramatically change the landscape of the drug world. So, what will be the next big thing that cannabis brings to the table? According to Big Tobacco, it could be new vapor technology.

It seems that every week there’s a new research study coming out that points to the fact that the future of tobacco companies involves becoming the “Cannabis industry.” The tobacco industry has been notoriously profitable for decades, but as people become more educated about the harmful effects of tobacco, as well as the fact that it’s a leading cause of cancer, the tobacco industry is moving away from making cigarettes and cigarettes only, and they’re moving in the direction of making “an alternative” product, that is, a cannabis-derived product.

Why-Cannabis-Is-Part-Of-The-Future-Of-Big-Tobacco

 

Many people were surprised when Philip Morris International (PMI) CEO Jacek Olczak told The Mail on Sunday that the UK government should treat cigarettes like gasoline vehicles and prohibit them in ten years.

However, CEO Kingsley Wheaton of British American Tobacco (BAT) told BBC Radio 4’s Today program a few days later that cannabis and its derivatives are part of the company’s future. “I believe [CBD vaping] will become more popular in the future, but the current issue is reducing the damage associated with tobacco and nicotine alternatives, which will encourage people to switch,” he added.

Both comments from the world’s major cigarette corporations show Big Tobacco’s continuing business model change. They also show a response to consumer trends.

By taking into consideration the health impact of their products, tobacco companies are trying to show their efforts to get away from traditional tobacco cigarettes. Vapour and heated tobacco products have become a trend in recent years. The use of e-cigarettes among high school students increased from 11.7% to 27.5% between 2017 and 2019. Such increase is driving overall tobacco use among high school students to 31.2%, according to a report by Truth Initiative, a nonprofit tobacco control organization.

Tobacco firms are progressively venturing into “cessation” products. E-cigarettes, vape goods, and heated tobacco technologies are used as switching or quitting aids in this area to bring the age of conventional cigarettes to an end.

However, Big Tobacco’s business model change is not restricted to providing new technology. Companies have begun to view cannabis as a way to break free from their reliance on cigarette sales. 

Tobacco firms’ interest in the cannabis business has grown in tandem with the growing number of US states that have legalized the drug.

PMI invested $20 million in Syqe Medicinal, an Israeli pharma-tech firm that developed a medical cannabis inhaler, in 2016. 

Oxford Cannabinoid Technologies (OCT), a biopharmaceutical business focusing on discovering, developing, and licensing cannabinoid-based medicines and treatments, received funding from Imperial Brands in 2018. Casa Verde Capital (CVC), the investment firm co-founded by American musician and cannabis entrepreneur Snoop Dogg, joined Imperial Brands in investing in this pharmaceutical business.

Another major tobacco firm, Altria Group, agreed to acquire a 45 percent interest in Cronos Group, a Canadian cannabis company, for $1.8 billion in 2018. 

Imperial Brands made a $123 million investment in Auxly Cannabis Group, a business headquartered in Canada that develops, manufactures, and distributes cannabis products for wellness and recreational use. 

VUSE CBD Zone, BAT’s first CBD vaping product, was released in 2021. BAT’s corporate venture arm, Btomorrow Ventures (BTV), funded $25 million in Trait Biosciences, a cannabis research business focusing on CBD-based drinks, in the same year.

Tobacco firms are attempting to diversify their products as the cannabis sector becomes more popular as more states legalize marijuana for medicinal and recreational purposes. This diversification is achieved not just by investing in innovative smoking devices that are expected to be less hazardous than conventional cigarettes, such as Juul (Altria) and IQOS (PMI), but also by offering customers new views, such as cannabis products.

In this regard, the cannabis business may be regarded a forerunner in terms of diversification. Cannabis businesses are already offering vape-based cannabis products, sweets, oils, and drinks as alternatives to conventional cannabis use.

Big Tobacco’s interest in cannabis, on the other hand, is not confined to its recreational usage. Imperial Brands’ investment in the biopharmaceutical firm OCT demonstrates the corporation’s interest in the medicinal cannabis market.

Big Tobacco’s involvement in the cannabis sector is evident not just in its commercial activities, but also in its lobbying efforts. Altria, the tobacco corporation, campaigned against cannabis sales in Virginia, according to Cannabis Wire. According to Cannabis Wire, this is the first time a cigarette corporation has lobbied on cannabis in the United States, either at the state or federal level. In addition, Altria spokesman George Parman told Cannabis Wire that the firm favors federal cannabis legalization within a reasonable regulatory framework.

In the cannabis business, Big Tobacco is rapidly becoming a participant. However, taking into account the frantic growth of the cannabis legal framework not only in the United States, but throughout the globe, it will take time to evaluate the weight of cigarette firms in the cannabis industry.

 

Dario Sabaghi is the author of this article. 

Big Tobacco spent billions of dollars trying to get their hands on cannabis. It was a great deal for them, but not so much for the people who inhaled the smoke. The industry was created to sell weed and cigarettes to the same people. It was their best bet at a broad market that also included doctors, nurses, and other members of the healthcare industry. But cannabis isn’t like tobacco. It doesn’t give you cancer or lung disease. It doesn’t lead to erectile dysfunction or mental health issues. It doesn’t make you a bad person, like Big Tobacco once claimed. Cannabis was a taboo, which is what made it such a tough competitor for Big Tobacco.. Read more about altria stock and let us know what you think.

This article broadly covered the following related topics:

  • big tobacco
  • altria stock
  • big tobacco stocks
  • cronos group
  • phillip morris stock
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