Part of cannabis and investment
Canadian Cannabis Producer Cronos Group will receive a $ 2.4 billion capital injection from the Altria Group, one of the largest tobacco companies in the world, a friendly agreement said on Friday.
Virginia-based Altria, the mother of Marlboro's cigarette maker, will acquire a 45% stake in the Torronto-based Cronos company on the initial investment.
Altria can invest up to $ 1.4 billion in four years, which will increase its stake in Cronos to 55%.
As part of the agreement, Altria will have the right to appoint four Cronos board directors who will be expanded to seven members out of five.
"Altria is the perfect partner for Cronos Group, providing the necessary resources and expertise to strategically accelerate our strategic growth," said Mike Gorenstein, Cronos President, CEO and CEO.
He added that Altria has "decades of experience in the field of regulation, management, compliance, product development and brand management that we expect to use, especially opening new markets for cannabis around the world."
Canada is the second country in the world to legalize a recreational sweat. Several US states also authorize the use of cannabis, but it remains illegal under US federal law.
"Investing in Cronos Group as an exclusive partner in the emerging global cannabis category is a new exciting growth opportunity for Altria," said Howard Willard, Chairman and CEO of Altria.
"We believe the excellent management team of Cronos Group has built the necessary global competition opportunities and we expect to help Cronos Group realize its significant growth potential."
Altria agreed to pay $ 16.25 per share to acquire 146.2 million shares of Cronos, which is above the pre-announced stock price.
It will also acquire warrants that will allow Altria to buy more shares at a price of $ 19 per share within four years.
The value of Canadian publicly traded cannabis companies rose to 17 October when cannabis sales became legal under the rules and regulations established by Ottawa and the provinces.
However, mainstream pots have generally withdrawn from their high levels in recent weeks amid reports of supply shortages and sales complications under the new regime.
Cronos has already confirmed that it is in talks with Altria, which joins Molson Coors, Constellation Brands and other established companies that are making cannabis space movements.
Its shares rose 35% before the launch after the announcement, which costs about $ 14 a share (from $ 10.45 for the fourth Nasdaq closing and $ 13.98 for the Toronto Stock Exchange).
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