Once big rivals, Big Tobacco and marijuana are poised to partner for big profits. The first forays are already underfoot.
According to the Centers for Disease Control and Prevention, the percentage of adults who smoke cigarettes in the United States has been on the decline since the 1960s. Part of that drop has been caused by increased awareness about the dangers of smoking. Part of the drop is due to Americans’ interest in other things.
One of those other things is marijuana.
Big Tobacco has viewed pot as both a competitor and a potential source of profits since at least the 1970s. As the substance’s popularity has increased and the legal marijuana market has grown, tobacco companies have begun to invest in cannabis.
Foreshadowing a shift into the legal marijuana biz, Imperial Tobacco changed its name to Imperial Brand in 2015. Then, last year, in a move that raised even more speculation, the company named Simon Langelier, the chairman of a Canadian cannabis oil extract supplier, to its board of directors.
As Imperial Chairman Mark Williamson told the Motley Fool, Langelier's “extensive international experience in tobacco and in wider consumer adjacencies will be a great asset to the board."
Also looking to expand into some of those “wider consumer adjacencies” is Philip Morris International of Switzerland, who, as High Times explains, has purchased a patent for a GMO plants with higher terpenes.
Not to be outdone, North Carolina-based tobacco company Alliance One International recently staked a claim in the pending legal pot market north of the border, purchasing an 80 percent stake in Canadian pot grow facility Goldleaf Pharm Inc.
It’s pretty obvious that Big Tobacco is banking on the fact that, one day, they will be able to sell marijuana to the public as easily as they can a pack of cigarettes. All that’s holding them back — and the rest of the industry — is outdated federal law.
When that changes, be ready for a full-on marriage between tobacco and marijuana.