Cronos Soars on Report Altria in Talks to Buy Canada Pot Company
Cronos Soars on Report Altria in Talks to Buy Canada Pot Company
(Bloomberg) -- Cronos Group Inc. soared, helping curb a broader decline in pot stocks, following a report that tobacco company Altria Group Inc. is in early talks to buy the Canadian cannabis producer.
Cronos jumped as much as 30 percent in New York following the Reuters report, which cited unidentified people familiar with the matter. Altria also jumped.
Cronos spokeswoman Anna Shlimak said the Toronto-based company doesn’t comment on market rumors. Altria’s Steven Callahan didn’t immediately return requests for comment. The tobacco firm based in Richmond, Virginia, said in September it was exploring its options on cannabis but would follow U.S. federal law, where the drug remains illegal.
Tobacco stocks rose on the report. Altria rose to a session high, adding as much as 2.4 percent, while Philip Morris International Inc. pared its decline.
Philip Morris, a spin-off of Altria, has said it isn’t interested in getting into cannabis. Chief Financial Officer Martin King in a November interview with Bloomberg reaffirmed that, saying the company had a lot going on in the tobacco space already. It has a "heat not burn" tobacco device, IQOS, which Altria would market in the U.S., if it gets regulatory approval.
The report caused the cannabis sector to moderate earlier declines prompted by a short-seller report that called Aphria Inc. a “black hole.” Aphria called the allegations “false and defamatory.” The company’s shares were down 20 percent at 12:13 p.m. in Toronto.
The Horizons Marijuana Life Sciences Index ETF was up 0.2 percent after earlier falling as much as 5.4 percent. Tilray Inc. rose 3.3 percent, reversing an earlier decline of 3.9 percent, and Canopy Growth Corp. added 0.4 percent after losing as much as 5.5 percent.
--With assistance from Janet Freund and Tiffany Kary.
To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net
To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, David Scanlan, Jonathan Roeder
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