Imperial Brands plc, a British multinational tobacco company based in Bristol have recently started to expand their portfolio into the cannabis sector. The company who are behind popular tobacco brands such as Embassy, Lambert & Butler, Richmond and Golden Virginia have invested into two cannabis-based companies in the last 14 months whose products range vary from medical cannabis to vaping technology.
The move comes as other huge multinational companies from other major industries are also taking an interest in CBD. From big pharmaceutical companies interest into the CBD market to the development of cannabis-based beverages by alcohol and soft drinks industries and cbd balms based for sore muscles.
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UK medical sector
Imperial Brands initial foray into the cannabis market occurred just as campaigning for the legalisation of medical cannabis in the UK was at its peak point, prior to the change of legislation in November 2019. The continuous investment is into a UK-based biopharmaceutical company, Oxford Cannabinoid Technologies, who are licensed in the UK to develop cannabis-based medicines.
Oxford Cannabinoid Technologies are focused on not only leading the worldwide research effort into cannabinoids but also developing different varieties of cannabinoid-based medicines for use in different therapies for a variety of diseases. CDO of Imperial Brands, Michael Phillips said, “Our investment enables Imperial to support OCT's important research while building a deeper understanding of the medical cannabis market.”
Next investment in Canada
The second move into the cannabis market by Imperial Brands was into a Canadian-based company, Auxly Cannabis Group, in a move Imperial have described as being part of an “ongoing diversification strategy.” The move is a venture into the nicotine-based alternatives to cigarettes like electronic vaping technology as well as into cannabis-based products. The £75 million investment secures Imperial Brands a 19.9% stake in Auxley and following the announcement of the investment the Auxley share price rose 20%.
Why the sudden interest in the cannabis market?
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The move comes at a time where more smokers than ever are turning away from combustible cigarettes and are turning towards nicotine-based alternatives, such as vape pens. The company who produce 320 billion cigarettes per year from 51 factories worldwide have noticed the “biggest consumer shift” in their history. As a result, they are focused on “developing and expanding” their portfolio beyond the tobacco industry. The motto adopted by the company during their investment into Oxford Cannabinoid Technologies was “From tobacco to something better.”
So, as the cigarette industry hits a potentially sticky patch, the cannabis industry has never been in a stronger position globally, with current estimates still predicting an annual industry worth of $22 billion by 2022.