Altria Exploring the Purchase of Chronos

In what could be the first major acquisition of a cannabis company by an established public company, Altria is reportedly attempting to purchase Canada's Cronos Group, according to Reuters. Citing people familiar with the matter, Reuters reports that Altria, the parent company of Marlboro cigarettes among other brands, has offered to purchase the marijuana producer in order to diversify its business away from tobacco. Cronos has not agreed to a deal and Reuters reports that negotiations could last several weeks and still may not result in a sale.

This isn't the first time Altria has made headlines regarding diversification recently, either. In other, related news in the sin stock world, it was also reported late last week that Altria was in talks with the e-cigarette manufacturer, Juul, to gain a minority stake in the company.

Shares of Cronos, which trades on the Nasdaq, jumped as much as 24 percent on the report. Neither company is commenting on the Reuters report. The Canadian based marijuana producer has operations on five continents under various brands. It generated $3.8 million in sales for the third quarter. Altria, which was formerly called Philip Morris, is a Fortune 200 company based in Richmond, VA. Its roots as a tobacco company date back to 1847 when it was founded in London. It was split off from Philip Morris in 2002. In addition to Marlboro, the company owns the U.S. Smokeless Tobacco Company, the maker of Copenhagen dipping tobacco, in addition to other tobacco brands like Nat Sherman. It also has a 10 percent equity investment in Anheuser-Busch InBev NV, the maker of Budweiser beer. Altria generated more than $25.5 billion dollars in sales in 2017.

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