Big Tobacco + Cannabis, A Marriage Made in Hell
- Another cannabis company has made a proverbial ‘Deal with the Devil’
It’s a pretty fundamental distinction. Tobacco smoke “is made up of thousands of chemicals, including at least 70 known to cause cancer.” Then there is the heart disease, lung disease and other ways in which tobacco products kill or cripple their addicts.
In contrast, cannabis is now being used medicinally to treat thousands of different health conditions – including providing relief for cancer sufferers. There are no known serious health problems associated with cannabis use.
The Seed Investor has already been a leading voice in highlighting the potential of cannabis products as a substitute for alcohol products. Alcohol sales are now in permanent decline due to the numerous health risks associated with this toxic and addictive substance.
Cannabis is non-toxic and non-addictive. It has the clear potential to claim hundreds of billions of dollars in market share from the $1 trillion per year alcohol industry.
Not surprisingly, Big Alcohol has already started to aggressively buy its way into the cannabis industry.
Tobacco products are much deadlier than alcohol products. More toxic. More addictive. And there is also a massive consumer market for these death products: a roughly $600 billion per year global industry.
Cannabis has enormous potential to take market share here as well. Consumers can shift from a recreational drug that kills in favor of a benign substitute — cannabis.
Not surprisingly, Big Tobacco has also started buying its way into the cannabis industry. In December 2018; Altria Group (US:MO) announced a $1.8 billion investment in Cronos Group,(US:CRON / CAN:CRON) acquiring a 45% interest in that company.
Now another major deal has been announced between Big Tobacco and the cannabis industry. Imperial Brands Plc (US:IMBBF) has announced a CAD$123 million investment in Auxly Cannabis Group (CAN:XLY / US:CBWTF).
It’s easy to see why multinational tobacco companies would want to associate with the cannabis industry. It’s much more than just ‘turning over a new leaf’.
It’s so that when people picture these companies, the first mental image that comes to mind is not a skull-and-crossbones, grave headstone, or some loved one dying from lung cancer.
What is much more difficult to understand is why publicly listed cannabis companies would want to associate with the tobacco industry. There are already enough negative optics associated with cannabis – thanks to the 100 years of absurd anti-cannabis lies that accompanied cannabis Prohibition.
Not only does the mainstream media continue to recycle these discredited anti-cannabis myths. It continues to fabricate new anti-cannabis fiction.
Cannabis companies are still trying to distance themselves from all of this negative mythology. Why would they want to add all of the negative “baggage” associated with tobacco use?
Many investors refuse to invest in tobacco companies for one very, simple reason. They don’t want to profit off of the death and misery of others.
For such investors, legal cannabis is a great alternative. It’s a lucrative investment opportunity that kills no one. With respect to the new tobacco/cannabis companies that are beginning to surface, investors have one big reason not to invest in such companies.
Published at Fri, 26 Jul 2019 10:00:02 +0000