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A tobacco giant has just made a big bet on a publicly traded Canadian cannabis company.
What’s happening:
- British American Tobacco (NYSE: BTI) has announced they will put $124.6M CAD into Canadian cannabis company Organigram (NASDAQ: OGI)
- The new infusion of capital will go towards developing a strategic investment arm inside of Organigram for special opportunities and expanding their wholly owned brands
Why it matters:
- Tobacco companies have been deploying capital into cannabis startups for the better part of a decade, from cannabis infused drinks to leading edge delivery system technology
- This new investment from British American Tobacco is further validation that the opportunity in cannabis is still exceptionally promising as global legalization continues to progress and regulations become more clear
By the numbers:
- $83.1M CAD of the British American Tobacco investment will go towards a new strategic pool of capital inside of Organigram which will be called Jupiter
- $41.5M CAD will go towards advancing Organigram’s cultivation facilities and cannabis derived branded products
Going deeper:
- British American Tobacco and Organigram have been collaborating on new product developments such as vapour formulations, flavour innovations and new types of packaging
- Organigram expects that they will begin to bring these scientific developments and new products out of stealth mode in the near future
