Questions over marijuana

Imperial Brands has made a move that could signal the beginning of a budding relationship between the tobacco and marijuana industries, according to a story by Dan Caplinger for Motley Fool.

As was reported here on June 13, Imperial last week named Simon Langelier as a non-executive member of its board of directors.

Langelier, who previously worked for Philip Morris, is also the chairman of a company called PharmaCielo, a Canada-based supplier of medicinal-grade cannabis oil extracts and related products.

Caplinger noted that, in welcoming Langelier to the board, Imperial’s chairman Mark Williamson had said Langelier’s “extensive international experience in tobacco and in wider consumer adjacencies will be a great asset to the board”.

Marijuana, said Caplinger, had become increasingly popular as many states across the US had legalized the drug for medical and/or recreational purposes, and more were considering doing so.

Some investors had sought to cash in on the trend but, until now, they had had only a limited number of investment choices available to them.

Many had wondered whether Big Tobacco might eventually choose to get in on the legal marijuana business, ‘offering their shareholders an easier way to profit from the drug’.

Caplinger speculated that Imperial’s action would ‘likely draw a response from fellow global players Philip Morris International … and British American Tobacco …, as well as US giants Altria … and Reynolds American’.

However, he went on to say that the ‘contradiction between marijuana being illegal at the federal level but legal in certain states is a huge impediment to big players like Altria and Reynolds American getting into the business.’

Caplinger’s piece is at: https://www.fool.com/investing/2017/06/16/cigarette-giant-imperial-brands-marijuana.aspx.