The current federal ban on pot means that large companies with robust logistical abilities don’t generally see the point of getting involved, since marijuana can’t cross state lines.
And while there are companies from other industries likely waiting on the sidelines in anticipation of making some big moves, other businesses have already made some significant investments into the Canadian pot market, where marijuana is legal at the federal level.
In the same month Altria announced the marijuana deal, it made an even bigger announcement: It was taking a 35% stake in e-cigarette company Juul for $12.8 billion.
While the Juul investment hasn’t been great , Cronos still presents some attractive growth prospects for the business that go beyond just vaping.
With a company like Altria backing Cronos, the cannabis company is able to benefit from significant research and development capabilities while still having a healthy stash of money to use for growth initiatives; Cronos reported more than $1 billion from its cash and short-term investments as of the end of June 30.
Meanwhile, for a company like Altria, which is already in the highly regulated tobacco market, getting into cannabis is a move that likely won’t overwhelm or intimidate its management.
Constellation Brands, known for its Corona brand, was the first big name to invest in the marijuana industry when it announced in 2017 it was taking a 9.9% stake in cannabis producer Canopy Growth.
But one of the advantages of the investment for Constellation Brands is that while cannabis-infused beverages are in their early growth stages, the company is able to test products in the Canadian market where the products are legal across the country.
Despite its struggles and ongoing transition as it works to get to profitability, like Cronos, it is one of the safer cannabis stocks for long-term investors to buy.
It was no surprise when the company finally took the plunge in 2019, investing CA$26 million to take a 9.9% stake in cannabis retailer Fire & Flower .
Fire & Flower has also given the partner the ability to use its Hifyre technology platform, which helps cannabis retail merchants analyze sales and identify trends.
For cannabis investors focused on the retail market, investing in Fire & Flower — which is backed by a growth machine like Couche-Tard that has more than 14,000 stores spread across 26 countries and territories — could lead to some great returns down the road.