Big Tobacco’s Latest $86.8 Million Cannabis Investment Signals Growing Industry Influence
British American Tobacco (NYSE:BTI), recognized as one of the top three tobacco companies globally by both market capitalization and net sales, has further entrenched itself in the cannabis industry, finalizing a strategic investment of C$124.6 million (approximately $86.8 million) in Organigram Holdings Inc. (NASDAQ:OGI), a leading Canadian licensed cannabis producer. The completion of this three-tranche investment cements BAT’s role as a major stakeholder in Organigram and highlights the increasing convergence of the tobacco and cannabis sectors.
A Strategic Move Amid Market Challenges
The investment, executed through BAT’s wholly owned subsidiary BT DE Investments Inc., marks another significant foray by a major tobacco company into the cannabis industry. As traditional tobacco markets shrink due to declining smoking rates and regulatory pressures, companies like BAT, Philip Morris International (NYSE:PM) and Altria Group (NYSE:MO) are seeking diversification in alternative markets, with cannabis proving an attractive prospect.
According to Paolo De Luca, chief strategy officer at Organigram, “Opportunities in the space have only improved with cannabis valuations at historically weaker levels and many cannabis and hemp companies unable to access cost-efficient growth capital despite fundamentally strong businesses.”
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