Cronos CEO: 'Watershed moment' for marijuana

Michael Gorenstein, CEO of Cronos Group, says legalized recreational marijuana in Canada "gets the ball rolling" globally.

Posted: Dec 4, 2018 8:44 PM
Updated: Dec 4, 2018 8:44 PM

The company that makes Marlboro cigarettes may be looking for a new vice. Altria could find that the red-hot cannabis industry is a much-needed supplement to its stagnant tobacco business.

Canadian cannabis company Cronos Group surged Monday after Reuters reported Altria may want to buy the company. The stock was up nearly 30% at one point before it was briefly halted for trading midday Monday. Shares were still up 12% when trading resumed.

Cronos (CRON) confirmed in a statement that it was discussing a potential investment by Altria, but Cronos said the two companies had not yet reached an agreement. Altria (MO) was not immediately available for comment.

Tobacco sales haven't budged much in recent years. That's why the cigarette giant reportedly had reportedly been interested in taking a minority stake in another Canadian pot company, Aphria (APHA) -- although Aphria's shares plunged Monday after one short seller referred to the company as a "black hole."

Altria is also rumored to be considering a big investment in e-cigarette company Juul in order to diversify beyond cigarettes.

Cronos, Aphria and other cannabis stocks have been thrust into the spotlight in the past few months following the legalization of recreational marijuana in Canada in October, as well as legalized recreational and medical pot in several US states last month.

With Democrats winning control of the US House, Congress may finally pass the Farm Bill, which would make it legal to produce hemp and potentially open the door for more products containing cannabidiol, or CBD.

Many alcoholic beverage, tobacco and even other consumer products companies may want to bet on cannabis. One Canadian marijuana company, Canopy Growth (CGC), already has received a multibillion dollar investment from Corona owner Constellation Brands (STZ).

Coca-Cola (KO) teased the possibility it could get into the cannabis business, saying in September it was "closely watching" the growth of CBD as a possible ingredient for so-called wellness beverages. CBD is a non-psychoactive component of marijuana.

At the same time, rumors swirled that Coke was considering an investment in Canadian cannabis company Aurora (ACB).

But Coke shot down the talk in October. CEO James Quincey said the company "doesn't have any plans at this stage" to enter the CBD market.

Coke's archrival Pepsi (PEP) hasn't completely ruled out a move into cannabis. Chief Financial Officer Hugh Johnston told analysts during its earnings call in October that "it's fair to say we look at everything" in response to a question about cannabis.

The Canadian subsidiary of Molson Coors (TAP) has a joint venture with The Hydropothecary Corporation to produce cannabis-infused drinks for the Canadian market.

Lagunitas, a beer brand owned by Heineken (HEINY), is selling a cannabis-infused sparkling water brand in California. UK alcoholic beverage giant Diageo (DEO) also could be interested in cannabis.

So it may be only a matter of time before a large US or European company winds up taking the plunge and buys a pot company outright.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 501097

Reported Deaths: 9990
CountyCasesDeaths
Harrison34338538
DeSoto32117403
Hinds31939628
Jackson24494382
Rankin21995390
Lee15543235
Madison14581280
Jones13851242
Forrest13453251
Lauderdale11991317
Lowndes11050188
Lamar10521135
Pearl River9533237
Lafayette8550140
Hancock7732127
Washington7438158
Oktibbeha7146131
Monroe6777177
Warren6694176
Pontotoc6664102
Neshoba6637206
Panola6531131
Marshall6467134
Bolivar6317148
Union602894
Pike5820152
Alcorn5669101
Lincoln5436135
George496879
Scott472898
Tippah469281
Prentiss467281
Leflore4658144
Itawamba4636105
Tate4588111
Adams4587119
Copiah448592
Simpson4446116
Yazoo444187
Wayne439772
Covington428894
Sunflower4239105
Marion4226108
Coahoma4160105
Leake408288
Newton381779
Grenada3707108
Stone360364
Tishomingo359792
Attala331589
Jasper329965
Winston314291
Clay308076
Chickasaw300367
Clarke292494
Calhoun279446
Holmes267987
Smith264050
Yalobusha234047
Tallahatchie228051
Greene219348
Walthall218763
Lawrence212940
Perry205556
Amite205156
Webster202946
Noxubee186740
Montgomery179656
Jefferson Davis171743
Carroll169138
Tunica159839
Benton148838
Kemper141941
Choctaw133426
Claiborne132737
Humphreys129538
Franklin120228
Quitman106428
Wilkinson105139
Jefferson94534
Sharkey64120
Issaquena1937
Unassigned00

Alabama Coronavirus Cases

Cases: 819597

Reported Deaths: 15406
CountyCasesDeaths
Jefferson1147901924
Mobile725791338
Madison52306697
Shelby37597350
Baldwin37245552
Tuscaloosa35101612
Montgomery34106740
Lee23526246
Calhoun22225488
Morgan20941378
Etowah19825500
Marshall18361304
Houston17384412
St. Clair16054339
Cullman15443293
Limestone15343199
Elmore15241286
Lauderdale14302295
Talladega13836283
DeKalb12649261
Walker11202370
Blount10192176
Autauga10043148
Jackson9871184
Coffee9210191
Dale8897185
Colbert8860201
Tallapoosa7084198
Escambia6772134
Covington6712183
Chilton6641162
Russell636659
Franklin5959105
Chambers5607142
Marion5005127
Dallas4973200
Pike4795106
Clarke475584
Geneva4571127
Winston4516103
Lawrence4321117
Bibb425186
Barbour357776
Marengo338090
Monroe331464
Randolph329764
Butler326396
Pickens316284
Henry312666
Hale311388
Cherokee302860
Fayette292880
Washington251551
Cleburne247760
Crenshaw245275
Clay243368
Macon234663
Lamar224147
Conecuh186153
Coosa180240
Lowndes175164
Wilcox168839
Bullock151644
Perry138840
Sumter133038
Greene126744
Choctaw88527
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Clear cool and dry to begin your weekend, but both afternoons should be a little bit above what we expect for this time of year temperature wise. Rain chances begin to return late Sunday night, with at least two chances for storms over the next week, summer could be strong.
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