British American Tobacco (BAT) has purchased 20% of Canadian licensed producer Organigram Holdings. This follows Altria Group's near takeover of Cronos Group in 2018. Altria owns the Marlboro brand.
Based in New Brunswick, Organigram is selling off 58.3 million shares at $3.79 per share. It adds up to $221 for the Canadian cannabis company.
With BAT's help, Organigram plans to enter the CBD smokeable market first. Organigram's stock price (NASDAQ: OGI) is $3,73, up 28% from the previous day.
“This is a tremendous milestone in the evolution of Organigram," CEO Greg Engel stated. "It s instrumental in advancing our commitment to offering consumers innovative cannabis products and to furthering our long-term international strategy. We've been extremely selective about aligning with a strategic partner and, in BAT, we’ve found a leading consumer goods business with sophisticated management, innovative product platforms, an impressive dedication to research and development, deep consumer insights, regulatory expertise and a commitment to responsible stewardship and consumer safety among many other enviable attributes. This collaboration is the culmination of extensive discussions and workshops and in-depth due diligence.”
In 2018, the Ontario-based Cronos sold 45% of the company to the U.S. tobacco giant Altria for $1.8 billion. Cronos stock (NASDAQ:CRON) is currently trading at $10.02. Altria owns Philip Morris USA.
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