Altria/Philip Morris/Big Tobacco Investing in Marijuana

By September 5, 2018SAM’s News

During an interview with Barclays Investments on September 5, 2018, tobacco industry executives from Altria (the parent company of tobacco giant Philip Morris) indicated their interest in taking advantage of marijuana as a new product line:

Gaurav Jain (Barclays)

There has been quite a bit of interest in the cannabis space, especially given recent news from several large beverage companies, can you remind us of your thoughts on cannabis?

Murray Garnick (Altria)

As you know cannabis remains illegal under Federal Law and we intend to continue to comply with Federal Law. Having said that, we are exploring options and we’re mindful of the possibility that in the future cannabis may longer be illegal under Federal Law.

Gaurav Jain (Barclays)

Sure. So coming back to the question that I’d asked on cannabis earlier. So I appreciate that. It is illegal in U.S. right now. But you are seeing some of the other, your peers in beer companies, which have invested in the Canadian cannabis companies. And you have an alcoholic beverages business. And there have been all part of studies would suggest, some suggest that there’s an impact and some suggest that there is no impact on alcoholic beverages. Does that lead to any focus on cannabis at all from the – just from the Ste. Michelle Wine Estates point of view?

William Gifford (Altria)

Yeah, I think Murray went to the extent. Look, we’re going to evaluate that category, understand it and really explore what our options are in that category.

Gaurav Jain (Barclays)

Sure. I would again ask the audience if there are any other questions.

Q – Unidentified Analyst

Were it legalized, is there any reason to believe that you would have a competitive advantage in the cannabis business, say, relative to a booze company?

Murray Garnick (Altria)

Well, it’s a hypothetical and actually we’re exploring our options. There’s nothing more… I can’t really go beyond that. We’re exploring our options. We’re studying and evaluating market opportunities. And obviously, that question is one of the questions we’re looking at.

See full transcript. Audio available with registration (questions at 11:15 and 30:20).

Garth Van Meter

Author Garth Van Meter

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