U.S. cigarette maker Altria Group Inc. has held recent talks with Canada-based Aphria Inc. about buying a minority stake in the cannabis grower, The (Toronto) Globe and Mail reported Oct. 10, citing multiple sources.
New York-based Altria, the tobacco giant that sells Marlboro cigarettes in the U.S., also expressed interest in eventually owning a majority of Aphria's shares, The Globe and Mail reported. Altria executives met with leadership at Aphria several times, including most recently on Oct. 8 in Canada, according to the report.
Details of the investment are still being finalized, and sources cautioned that a deal could take time to hammer out and may never materialize, according to the report.
"While Aphria engages in discussions with potential strategic partners and/or investors from time to time, the company notes that there is no agreement, understanding or arrangement in place with a potential investor at this time," it said in a statement Oct. 10.
Altria spokesman David Sutton declined to comment on the report to S&P Global Market Intelligence.
The deal would push Altria into the Canadian cannabis market as the country is set to legalize recreational use Oct. 17.
Beer makers have already seized upon the opportunity, with Constellation Brands Inc.'s C$5 billion investment in Canopy Growth Corp. and plan to launch a cannabis-infused beverage in 2019. Molson Coors Brewing Co. and HEXO Corp. have also partnered to launch cannabis drinks in Canada.
Walmart Inc. has also researched selling cannabis products in Canada but is not immediately planning to enter the market.