uploads///Aphria and Altria Stock

Tobacco Companies and Their Newfound Interest in Cannabis

By

Dec. 4 2020, Updated 10:52 a.m. ET

Tobacco and cannabis

On October 10, Reuters reported that tobacco giant Altria is in discussions with Aphria (APHQF) about acquiring a stake in the company. The initial round of investments would give Altria a minority stake in Aphria with the possibility of acquiring a majority stake.

Article continues below advertisement

Stock reactions

Following the news, Aphria stock gained 15.2% to close the day at 20.1 Canadian dollars as investors rushed to capitalize on the opportunity. Altria (MO) lost 30 basis points to close at $62.90 per share. The deal has not been finalized, but we’ll probably hear more about it in the coming days.

Aphria provided an official response to the development, stating that it currently doesn’t have an understanding or agreement with a potential investor.

The news should not be surprising to investors who track companies such as Aphria, Canopy Growth (WEED), and Aurora Cannabis (ACB) (ACBFF). US consumer companies have been showing interest in Canadian cannabis companies. The aim is to develop cannabis-infused products and reach newer audiences and markets.

We do know that Constellation Brands and Molson Coors have invested in Canopy Growth and Hexo, respectively. Companies (HMMJ) are developing medical and recreational products in diverse formats to attract new customers who have never used cannabis.

Advertisement

More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.