Tobacco giant British American Tobacco enters cannabis business

bat cannabis flowchart

British American Tobacco buys 20% of Organigram

Brand giant, Lucky Strike, bought 20% of the shares of Canadian cannabis company Organigram for $ 176 million. Together, they promise to produce the “next generation of cannabis products,” initially primarily CBD.

BAT looks beyond tobacco to Canadian marijuana

British American Tobacco, Britain's largest cigarettes and tobacco which owns brands such as Lucky Strike intends to enter the field of CBD (cannabidiol) recently recognized as a drug by the FDA.

Organigram grows cannabis and manufactures cannabis derivatives in Canada, where marijuana was legalized in 2018. Under the deal, BAT will receive 58,3 million shares of Organigram, which is 19,9 million. % of the company's shares, priced at $ 3,02 per share, higher than the average of $ 2,89 in which Organigram was last traded. week. Each company will have access to the intellectual property of the other company, BAT being able to appoint 20% of the members of Organigram's board of directors, provided that it owns at least 15% of the shares of the company.

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Since the announcement a short time ago, Organigram shares have climbed nearly 50% in pre-trade. Over the past 12 months, Organigram's share has increased by 68%.

“As global cannabis deregulation accelerates, led by the United States, we have been approached by a growing number of Big Tobacco, Big Pharma and large consumer companies looking to invest in the cannabis sector, ”said declared Tristan Gervais, Head of Cannabis at Chrystal Capital advises Cannabis Merchant Bank in Europe.

The Marlboro Maker Altria invested in the producer of Cronos Group, while the manufacturer of Corona beer Constellation Brands owns a stake in Canopy Growth, the world's largest cannabis company by market value.

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