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The tobacco industry has long-standing interest in cannabis as a potential product. 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 been interested in commercial cannabis manufacture.1


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   

Cannabis legalisation and decriminalisation has become more prevalent in recent years.3 In the US, where recreational cannabis is now legal in 11 states,4 tobacco companies have leant their support to pro-cannabis groups lobbying for legalisation.5

With falling cigarette sales in developed markets, and the relaxation of cannabis laws, there is an increased “legal demand” for cannabis products.6 This is an opportunity for tobacco companies to invest in a market worth an estimated US$200 billion worldwide (Euromonitor data).7 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.8 The tobacco industry is keen to promote its associations with harm reduction and pharmaceuticals over conventional cigarettes and cannabis offers an opportunity to do so.

As cannabis moves from a model of prohibition to one of legal regulation and as tobacco companies invest in the sector, the industry may start to mirror the tactics of Big Tobacco, including “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, according to illict trade expert Benoit Gomis.

Transnational Tobacco Company Investments in Cannabis

Philip Morris International

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 2016.10 PMI has not publicly spoken about the investment.


In December 2017, Altria made an investment of US$1.8 billion for 45% of Cronos Group, a Canadian cannabis company.11 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.”12 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.13

Imperial Brands

In April 2018 Imperial invested in Oxford Cannabinoid Technologies (OCT) which describes itself as managing “a wide-ranging research program that investigates the medical potential of cannabinoids across different therapeutic areas.”14 OCT is licensed by the Home Office.

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.”1516 In an interview in April 2019, Imperial’s then Chief Executive Officer Alison Cooper refused to disclose the amount invested in OCT but said that it was an “interesting area to look at”.17 

In 2019, Imperial increased its stake in the cannabis market, investing GB£75 million in Auxly, a Canadian “global leader in branded cannabis products”.18 Imperial described the move as an expansion of its “next generation product” portfolio.19

In September 2019, a “partnership agreement” was finalised between Imperial and Canadian cannabis producer Auxly Cannabis Group.2021 As part of the deal, Imperial paid GB£85 million to acquire 19.9% stake in Auxly. Imperial will also give Auxly “worldwide licences for its vaporization technology” and access to its subsidiary Nerudia.20 Auxly has also become “an exclusive partner for Imperial’s cannabis-related business activities”.20 It is unclear whether this arrangement precludes Imperial from making further partnership deals with cannabis companies.

British American Tobacco

In February 2020, BAT announced that they were researching CBD and THC flavourings for its Vype and Vuse e-cigarettes at its research facility in Southampton, but not “actively pursuing” these flavours for sale.22 However, in January 2021, BAT began test-marketing a range of CBD products called the “VUSE CBD Zone in Manchester, UK, 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 2021.23

Via BTomorrow Ventures, set up in 2020, BAT invested in start-ups working on cannabis, CBD and other “wellness” products.24 As of November 2022, the dedicated website listed the following cannabis related companies in its portfolio:25

  • Trait Biosciences – “Innovative Science advancing cannabinoid production technology”.252627
  • Cannopeaia – “Proprietary cannabis vaping technology”.2528
  • Unrooted – “Functional beverages boosted by African baobab”.25 Unrooted’s website stated that it used CBD in one of its products.29
  • Open Book Extracts – “Cannabinoid innovation house”.25 Open Book Extracts’ website states that it has the “Broadest cannabinoid portfolio in the market”.30

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 includes an agreement to build an R&D Center of Excellence in New Brunswick.3132

In September 2022, BAT acquired a non-controlling minority stake in the German cannabis company Sanity Group.33 BAT said that this added “a European dimension to one of the many BAT explorations beyond nicotine”.33 Sanity Group’s portfolio includes CBD products and medical cannabis.33 On 27 September Sanity Group announced that its latest funding round was “led by BAT Group.”34

In November 2022, BAT invested GB£48.2 million in a nearly 20% share of Charlotte’s Web, a cannabinoid extract retailer.35BAT 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.”35

For more see British American Tobacco: Btomorrow Ventures and Tobacco Company Investments in Pharmaceutical & NRT Products.

Tobacco staff migration

Several tobacco company employees and people associated with the tobacco industry have been taking roles in the growing cannabis industry. 

  • 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 CEO36 and CSO respectively.37
  • 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 2020.38
  • PharmaCielo, a Canadian cannabis oil company with operations in Colombia, has a number of tobacco industry executives, and industry-linked scientists, on its Board of Directors. These include:

Relevant Links

TobaccoTactics Resources


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