The marijuana industry is so bad right now that it can’t even light a big tobacco

You should fear us.

It was the end of her lung cancer reign.

You should better “get in or be run over”, it was loudly said 5 years ago.

Now, Altria, one of the world’s largest tobacco companies, is cutting its losses to nearly half a billion dollars and divesting itself of its Cronos investment and cannabis in general. Walking away might be difficult as they will retain a 45% stake in the cannabis company, but according to their press release, they will no longer exercise warrants to buy shares and therefore not move forward with a 52% stake in the company. As their website says:

Altria Group, Inc (NYSE:MO) announced today that its wholly owned subsidiary, Altria Summit LLC, is notifying Cronos Group Inc. (Cronos) of its irrevocable waiver of (i) its warrant to purchase additional common shares of Cronos (the Warrant). has ) and (ii) all rights which it may have gratuitously held in the warrant or in the common stock underlying the warrant…

As a result of the warrant’s cancellation, Altria expects to report a capital loss of $483 million on its 2022 consolidated U.S. income tax return. Altria continues to own 156,573,537 common shares of Cronos.

While this isn’t the final bell in the “cannabis versus tobacco war,” it’s certainly disheartening to see your opponent walk away with a grin and say, “Yeah, you’re just not that interesting as a business model, we will.” Cut our losses to $500 million and just walk away, thank you very much.

Even cigarette companies are protected by federal laws, licenses, and international distribution channels, something the cannabis industry desperately needs to be competitive on a global scale.

Arguably the most troubling part of this move is that Altria doesn’t see the benefits or the “future benefits” of owning more shares or getting their money back. Hundreds of analysts processing numbers and looking at how this cannabis investment could be saved for the future concluded: “No, cut the bait, walk away is our best bet, stop the bleed.” where she is right now”. That means a company said it’s better to lose $500 million now than wait for future upside, and therefore doesn’t see much future upside for that investment.

Big Tobacco isn’t concerned about legal cannabis at the moment, sorry.

CANNABIS AND BIG TOBACCO, READ MORE…

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