Canadian cannabis company Cronos Group Inc. (CRON.T) said Friday that tobacco giant Altria Group Inc. (MO) has agreed to make a C$2.4 billion ($1.8 billion) equity investment in the company to provide the capital to help it expand and innovate. As part of the deal, Altria will receive warrants that if fully exercised would grant the company an additional C$1.4 billion. Altria will have a roughly 45% ownership stake in the company that would climb to 55% if the warrants are exercised. "This strategic partnership provides Cronos Group with additional financial resources, product development and commercialization capabilities, and deep regulatory expertise to better position the Company to compete, scale and lead the rapidly growing global cannabis industry," Cronos said in a statement. The new legal Canadian cannabis market is attracting investment from a range of players, including a $4 billion investment from Constellation Brands Inc. (STZ) in Canopy Growth Corp. (WEED.T). Cronos will be Altria's exclusive partner in pursuing opportunities in the sector, said the statement. The deal is expected to close in the first half of 2019. Altria shares rose 1.1% premarket. Cronos shares were halted for the news, but have gained 35% in 2018, while the S&P 500 has gained 0.8%.
-Ciara Linnane; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
December 07, 2018 14:03 ET (19:03 GMT)
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