Cannabis
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Cannabis, Tobacco Tactics, updated 20 March 2026, accessed 28 March 2026.
The tobacco industry has a long-standing interest in cannabis. Internal industry documents reveal that since 1970, Philip Morris International (PMI), British American Tobacco (BAT) and RJ Reynolds (now owned by BAT as part of Reynolds American Inc., RAI) have all had an interest in commercial cannabis manufacture.1 More recently, Imperial Brands joined them.
In a 1970 memo on cannabis, George Weissman, President of Philip Morris wrote:
“While I am opposed to its use, I recognize that it may be legalized in the near future[…] Thus, with these great auspices, we should be in a position to examine: 1. A potential competition, 2. A possible product, 3. At this time, cooperate with the government.”2
Background
With falling cigarette sales in developed markets, and the relaxation of cannabis laws, the “legal demand” for cannabis products has grown.34 This has presented an opportunity for transnational tobacco companies (TTCs) to invest in a global market worth an estimated US$20 billion in 2019 and estimated to reach US$100 billion within a decade. (Euromonitor data).56
There are several reasons for tobacco companies’ interest: the functional similarities of cannabis production; its use with tobacco in roll-your-own (RYO) cigarettes; the ability to extract its active ingredients (tetrahydrocannabinol (THC) and cannabidiol (CBD)) for use in e-cigarettes; and its medicinal potential.7 The tobacco industry is keen to promote its associations with harm reduction and pharmaceuticals over combustible cigarettes, and cannabis offers an opportunity to do so.8
As cannabis moves from a model of prohibition to one of legal regulation, and as tobacco companies invest in the sector, there have been warnings that the cannabis industry is adopting the tactics of Big Tobacco.91011 According to illicit trade expert Benoit Gomis this might include “pushing governments to crack down on smaller competitors, funding research which fits their own commercial and reputational interests, or exploiting traditional cannabis growers in lower-income countries, and lobbying against public-health oriented regulations and in favour of more industry-friendly ones.”9,
In the US, where recreational cannabis has been legalised in some but not all states,1213 tobacco companies have supported pro-cannabis groups lobbying for legalisation.14
The third party tactic is well known in the tobacco field. Altria and Reynolds/BAT have been members of The Coalition for Cannabis Policy, Education, and Regulation (CPEAR).1115
Transnational Tobacco Company Investments in Cannabis
Philip Morris International
Syqe Medical
In 2016, PMI invested US$20 million in Syqe Medical, an Israeli company developing a medical cannabis inhaler. This was the second largest cannabis investment in 2016.16 In 2023, PMI announced an investment of US$120 million, in order to submit Syqe’s inhaler to the US Food and Drug Administration (FDA) for approval.17 If successful, PMI would then acquire the whole company for US$650 million.18
Altria
Cronos Group
In December 2018, Altria made an investment of US$1.8 billion for 45% of Cronos Group, a Canadian cannabis company.192021 In its 2020 “10 Year Vision”, Altria said it wants to “Help position Cronos as a leader in a highly responsible, regulated and legalized U.S. cannabis market.”22 However, in November 2019, Altria declared its investment had reduced in value by US$731 million, because of the complicated regulatory procedures surrounding cannabis products.23 In 2022, Altria announced that it would not take up further shares in Cronos.24
Lexaria Bioscience
Altria has invested in Lexaria Bioscience, whose DehydraTECH is designed to improve drug delivery, including for substances such as CBD. See Tobacco Company Investments in Pharmaceutical & NRT Products.
Imperial Brands
Oxford Cannabinoid Technologies
In April 2018, Imperial invested in Oxford Cannabinoid Technologies (OCT), a biopharmaceutical company focused on researching, developing and licensing cannabinoid-based compounds and therapies.25 OCT was licensed by the Home Office.26
Matthew Phillips, Chief Development Officer at Imperial, said:
“We are pleased to be partnering with OCT. Cannabinoid products have significant potential and our investment enables Imperial to support OCT’s important research while building a deeper understanding of the medical cannabis market.”25
OCT expanded into oncology in 2023, developing immunotherapies for treating tumours.27
OCT delisted from the London Stock Exchange in 2024.28 Despite Imperial’s nearly 10% stake, it did not raise enough investment.29 The company was rebranded Octavian Therapeutics, but ceased trading and entered into financial administration in May 2025.29303132
Auxly
In 2019, Imperial announced a “research and development partnership” with Auxly, a Canadian “global leader in branded cannabis products”.3334
This partnership consisted of a GB£75 million debenture (loan) from Imperial to Auxly, convertible into a 19.9% share of the company. Imperial also granted Auxly “global licenses to its vaping technology and access to its innovation business Nerudia”,33 and committed to using Auxly as an “exclusive partner” for the development, manufacture, commercialization, sale and distribution of cannabis products anywhere in the world.35 Imperial described the move as an expansion of its “next generation product” portfolio.33
Auxly refinanced in 2025, and Imperial converted Auxly’s outstanding debt into shares and pre-funded warrants allowing it to purchase further shares. Assuming these additional shares are purchased, Imperial will own and control 19.9% of all issued and outstanding Auxly shares.3637
British American Tobacco
In February 2020, BAT announced that it was researching CBD and THC flavourings for its Vype and Vuse e-cigarettes in the UK at its research facility in Southampton, but not “actively pursuing” these flavours for sale.38 However, in January 2021, BAT began test-marketing a range of CBD products called the “VUSE CBD Zone” in theUK, saying this was part of its efforts to go “beyond nicotine”. BAT referred to a potential nationwide roll-out of VUSE CBD Zone later on in 2021.39 It is unclear if this roll out took place. Although the BAT website states that Vuse CBD Zone is available in different flavours and strengths,40 as of 2026, the UK Vuse website does not appear to sell any CBD products.41
Via BTomorrow Ventures, set up in 2020, BAT has invested in start-ups working on cannabis, CBD and other “wellness” products.4243 These include:
- Trait Biosciences – “Innovative Science advancing cannabinoid production technology”.434445
- Cannopeaia – “Proprietary cannabis vaping technology”.4346
- Unrooted – “Functional beverages boosted by African baobab”.4347
- Open Book Extracts – “Cannabinoid innovation house”.4348
Organigram
In March 2021, BAT bought a 20% stake in Organigram, a Canadian cannabis producer with plans to produce “next-generation” CBD based cannabis products. The C$221 million investment included an agreement to build an R&D Center of Excellence in New Brunswick.404950 BAT states on its website that this strategic partnership “focuses on research and product development activities of next generation adult cannabis products, with an initial focus on cannabidiol (CBD).”40
Sanity Group
In September 2022, BAT acquired a non-controlling minority stake in the German cannabis company Sanity Group.51 BAT said that this added “a European dimension to one of the many BAT explorations beyond nicotine”.51 Sanity Group’s portfolio includes CBD products and medical cannabis.51 On 27 September Sanity Group announced that its latest funding round was “led by BAT Group.”52
Organigram Aquires Sanity Group
In February 2026, Organigram Acquired Sanity Group, with BAT contributing over C$65 million (US$48 million) in additional funding.535455 Organigram stated that “This transformational acquisition will bring together two market leaders, extend our commercial footprint into Europe, and strengthen our competitive edge in the world’s largest federally legal cannabis markets.” 55 A senior BAT’s executive was appointed CEO of Organigram in January 2026. See People below for details.
Charlotte’s Web
In November 2022, BAT invested GB£48.2 million in a nearly 20% share of Charlotte’s Web, a cannabinoid extract retailer.56 BAT said that the appeal of the company was that it had “a wide portfolio of high-quality products, strong brand equity, an extensive retail presence and robust B2C e-commerce platform serving a loyal US consumer base, and a track record of in-depth scientific research.”56
In 2023, Charlotte’s Web formed a joint venture named DeFloria, with BAT and AJNA BioSciences, in order to put a hemp-based drug through the FDA approval process.5758 BAT took a 20% stake in the joint venture,5758 investing US$10 million in 2023,59 and an additional US$5 million in 2024.60
Lexaria Bioscence
BAT has a research and development deal with Lexaria Bioscience.
- For more see British American Tobacco: Btomorrow Ventures and Tobacco Company Investments in Pharmaceutical & NRT Products.
People
Tobacco company employees, and others associated with the tobacco industry, have taken on roles in the cannabis industry:
- In January 2026, James Yamanaka, ex Global Head of Strategy at BAT, became CEO of Organigram, just before its takeover of Sanity Group.556162
- In 2020, Boldt Runners Corp., seller of Cannadips CBD pouches (similar to snus-style nicotine pouches), appointed former Altria executives Peter Diatelevi and Maura Scott as CEO63 and CSO respectively.64
- Taat Lifestyle and Wellness, producer of the ‘Beyond Tobacco’ hemp cigarette (not yet launched as of October 2020), appointed former PMI commercialization executive Tim Corkum as Chief Revenue Officer in 2020.65
- PharmaCielo, a Canadian cannabis oil company with operations in Colombia, has had a number of tobacco industry executives, and industry-linked scientists, on its Board of Directors. These include:
- Simon Langelier – Chair of the PharmaCielo Board. Langelier joined PharmaCielo in 2015 after a 30 year career with PMI.66 In 2017, he also became a Non-Executive Director at Imperial Tobacco.67
- Matteo Pellegrini – joined PharmaCielo in April 2017.68 From 2003 to 2015 Pellegrini was PMI’s President of Asia where he led PMI’s Asian expansion.69
- Delon Human – joined PharmaCielo in November 2016 as Vice Chair of PharmaCielo’s Board.70
- Riccardo Polosa – Medical and Scientific Advisory Board (MSAB). Polosa has previously received funding from PMI, worked as a contractor for BAT and founded the Centre of Excellence for the Acceleration of Harm Reduction (CoEHAR), a grantee of the Foundation for a Smoke-Free World.71
Relevant Links
- Alcohol, Drugs and Addictive Behaviours: Cannabis, World Health Organization, website, undated.
- WHO review of cannabis and cannabis-related substances, World Health Organization, Health products policy and standards, 2019
- Alcohol, e-cigarettes, cannabis: concerning trends in adolescent substance use, World Health Organization, press release, April 2024
Tobacco Tactics Resources
- Tobacco Company Investments in Pharmaceutical & NRT Products
- Newer Nicotine and Tobacco Products
- Tobacco Supply Chain Database