Is Big Tobacco Pivoting to Big Cannabis?

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That coming change in policy almost certainly made Monday’s deal even more enticing for British American Tobacco, one of the largest tobacco companies in the world. The acquisition could also be seen as a reflection of an emerging trend: cannabis is the future, while tobacco––specifically cigarettes––is increasingly a relic of the past. In Germany, government officials are readying plans to legalize recreational cannabis, a move that will make the country the world’s largest legal marijuana market. A survey from Gallup last month found that a mere 11% of Americans reported as cigarette smokers, an all-time low. Those consumer trends may continue to shift as marijuana becomes legal in more markets both in the United States and beyond.

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British American Tobacco announced Monday that it has acquired a non-controlling minority stake in the Berlin-based marijuana startup Sanity Group GmbH.

Kingsley Wheaton, the chief growth officer at BAT, characterized the deal as an example of the company’s “ongoing work to explore numerous areas beyond nicotine, positioning BAT for future portfolio growth across a range of categories and geographies.”

“We continue to transform our business, through better understanding of our current and future consumers, as part of our A Better Tomorrow purpose,” Wheaton said in a press release. 

The acquisition could also be seen as a reflection...

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