Alliance One International Inc. has made history this week, after announcing its partnership with two major Canadian cannabis companies. 

Secured through Alliance One’s complete indirect subsidiary, Canadian Cultivated Products, Ltd., the “One Tomorrow” strategy saw the major U.S. tobacco company purchase 75 percent of Canada’s Island Garden Inc. and 80 percent ownership of Goldleaf Pharm Inc.

An investment of this magnitude has never been seen by the cannabis industry before.

The news of Alliance One buying cannabis company stakes was announced in a press release on February 8, which also detailed the company’s sales and gross profit for the fiscal quarter, concluding on December 31, 2017.

In the company’s third quarter, total sales soared by 5.1 percent to $477.8 million and gross profit grew by 12.8 percent to an impressive $73.5 million.

“Alliance One is transforming itself to realize its potential as a purpose driven organization with a clear vision and focus on achieving competitive distinction and building upon new opportunities to increase shareholder value,” the press release states.

Money earned through the company’s operations will be poured into the expansion, which will see Canada’s Island Garden increase its 20,000 square-foot Prince Edward Island-based growing facility to 250,000 square-feet. By the time Goldleaf completes the construction of a 20,000 square-foot indoor space in Ontario, the investor anticipates a combined facility area measuring one million square feet.

Who is Alliance One?

Headquartered in Morrisville, North Carolina, Alliance One is an independent global contractor, supplier, purchaser, processor and packer of leaf tobacco. The company boasts close connections with contract growers throughout North America, South America, Asia, Africa and Europe.

“We have moved proactively on compelling opportunities to strengthen our company. Everything we do is to transform people’s lives so that together we can grow a better world,” is a statement from the company.

With a market capitalization value of $117 million and revenue amounting to $1.2 billion during the first nine months, Alliance seems to be doing something right. Its latest acquisition should push the US publicly-traded firm to new realms of success. Although the investment price tag was not mentioned, the company declared their intention to expand their business portfolio over the course of the ensuing 3 to 4 years, by maintaining a heavy focus on consumer-driven agricultural products.

Increased focus on cannabis industry investments

It’s no secret that the cannabis industry is flourishing. Transactions, similar to Alliance One buying cannabis company stakes, are not uncommon nowadays. In October 2017, winery company Constellation Brands purchased 9.9 percent of world leading diversified cannabis company, Canopy Growth Corporation, for $190 million.

These transactions are a sign of the direction in which the industry is headed and there’s a good chance that cannabis use may soon replace alcohol consumption. As Canada sets its sights on dominating the cannabis market this summer, Alliance One could too be on the brink of global domination.

CEO of Canada’s Island Garden, Edwin Jewell, claims that the expansion could cost as much as $40 million. The idea of teaming up with Alliance One “felt different,” according to Jewell, who considered the decline of the global tobacco industry and decided that it “made sense” to be a part of the independent leaf tobacco merchant’s evolving business dynamic.

In addition to this, Alliance One recently obtained a 40 percent stake in the potential “leader in CBD production and consumer products,” better known as Criticality.