Phillip Morris, the international tobacco company behind the cigarette brand Marlboro, are considering entering the cannabis industry.
In an interview with Bloomberg News, Phillip Morris CEO Andre Calatzopoulos said that they are looking into expanding into the cannabis market with a smoke-free product of their own. While still hesitant to enter the growing market due to a lack of regulations, Phillip Morris are looking into the efficacy of cannabis, as well as the different medical and consumer cannabis products currently on offer.
“We are doing all this work and will determine one day what avenues to pursue. But our priority is what we’re doing with our smoke-free products, and that’s where I would stay on cannabis,” Calatzopoulos told Bloomberg News.
Tobacco Companies Entering the Cannabis Industry
Phillip Morris are not the only tobacco company currently interested in entering the cannabis industry. Earlier in 2021, British American Tobacco invested in Organigram Holdings Inc. to produce CBD products, and in 2018, the US Marlboro distributor Altria Group invested in Canadian cannabis company The Cronos Group.
Phillip Morris’ expansion into the smoke-free cannabis market would not be the first time they have invested funds into the cannabis industry. In 2016, the company invested in Israeli-based medical cannabis company Syqe Medical for exclusive technology rights for an inhaler produced by Syqe Medical. While the inhalers produced by Syqe Medical were originally designed for medical cannabis purposes, Phillip Morris purchased the technology rights to produce a high-precision dosing product for the smoke-free tobacco industry.
Cannabis Products Part of a Broader Product Expansion Strategy
Phillip Morris’ vested interest in cannabis products is part of a broader strategy the company has begun to undertake in the beginning of this year.
Dubbed “Beyond Nicotine”, the tobacco company is planning to expand their product line beyond smokables and nicotine products. Since beginning the strategy, Phillip Morris have begun to expand their product line to include botanical-based products as the company strives to reduce cigarette consumption by offering other healthier alternatives and smoke-free nicotine products.
Since announcing their Beyond Nicotine strategy, Phillip Morris have set a goal of $1 billion in net revenue from their non-nicotine product lines for the next 4 years. If successful, these products will outperform their current tobacco products in net revenue, creating the largest revenue producers for Phillip Morris.
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