On Friday, March 8, 2018, a $1.8 billion investment was funneled into Ontario-based cannabis producer Cronos Group by well-known tobacco giant, Altria Group.

When the deal was sealed, it marked a moment that would go down in history – the biggest investment in the legal cannabis space by a tobacco company.

About Altria and Cronos Group  

Headquartered in Henrico County, Virginia, Altria boasts worldwide operations. The American corporation is known for being one of the leading global suppliers of cigarettes and tobacco. Now, Altria owns a 45 percent stake of integrated cannabis firm Cronos. In addition to this, Altria has a warrant that could bolster its ownership to 55 percent, if exercised.

Cronos Group, which became the first pot stock to list from the over-the-counter (OTC) exchange to a major U.S. exchange, plans to complete another huge project by the second half of this year.  The project involves the development of an 850,000 square-foot greenhouse, capable of producing 150,000+ pounds of weed per year.

The company trades on the Toronto Stock Exchange and the NASDAQ under the ticker symbol CRON.

Cronos CEO wants to expand product development 

The CEO of Cronos, Mike Gorenstein, believes that Altria’s investment will increase the company’s financial resources. In addition to this, he is hopeful that the investment will enhance the company’s regulatory expertise, as well as enable Cronos to expand its product development and commercialization capabilities.

During a previous interview with Marijuana Business Daily, Cronos said it is happy with the capacity it currently has in Canada and does not require mergers and acquisitions in this particular market.

“We will continue to work with our joint venture partners for cultivation in both the Canadian and international markets, as well as pursue alternative means of cannabinoid development through our Ginkgo partnership,” a company spokesperson said.

Back in September, Cronos closed a deal with a company in Boston called Ginkgo Bioworks. The $122 million partnership will see the two companies join forces to biologically engineer a wide range of cannabinoids.

Cronos to become Altria’s exclusive partner

You might be wondering why Altria is swapping tobacco for weed. According to Cronos Group’s Chief Executive Mike Gorenstein, the company is minimizing risk and “increasing choice” with its decision to replace combustible cigarettes.

“That’s something I think is pretty important,” said Gorenstein. “I think it’s also a key point that [Altria] is encouraging about the medical business, they do have a lot of experience with the [Food and Drug Administration] and research.”

Based on the details of the Altria-Cronos business partnership, Cronos will also become Altria’s exclusive partner for international cannabis opportunities.