Why Big Tobacco companies are increasingly becoming players in the hemp market
Big Tobacco's interest in the hemp industry goes beyond recreational uses of the plant. For example, Imperial Brands' investment in the biopharmaceutical company Oxford Cannabinoid Technologies demonstrates its interest in the medical segment of the hemp industry.
The trend observed over the past 3-5 years, according to which the global tobacco giants are investing in both hemp and technologies that use the therapeutic properties of the plant, suggests that hemp is not so much viewed as a “tobacco substitute”, but is becoming a stick. -a lifesaver for large tobacco companies. The editors of the specialized electronic edition of national cannabis growers have already focused the attention of our dear readers and listeners on “How the situation with vaping in English-speaking countries can be of interest to the national cannabis market”, however, recent events related to cannabis and the world's largest tobacco companies make us once again turn to to this topic.
Let us analyze individual theses of representatives of several companies at once representing the Big Tobacco company, taking as a basis their statements in various interviews with the media:
- General Director of Philip Morris International Jacek Olczak, who stated that “the UK government should treat cigarettes like gasoline-powered cars and ban them after 10 years”;
- British American Tobacco Executive Director Kingsley Wheaton, who, during his speech on BBC Radio 4, emphasized that “CBD vaping is part of the future of the global tobacco industry. Tobacco companies must focus on tackling the industry's main challenge, which is to reduce the harm from tobacco and nicotine alternatives that encourage consumers to switch to alternative products. ”
Both statements from the management of the largest tobacco companies in the world indicate a continuing change in the vision of the development of business models of the largest tobacco companies in the world, which demonstrate the reaction of manufacturers to clear consumer trends.
We can say that tobacco products based on the technology of using steam or heating have become a trend in the tobacco market in recent years. Given the negative impact of manufactured products on consumer health, tobacco companies are not only demonstrating efforts to replace traditional tobacco-based cigarettes with alternative products with therapeutic potential. Tobacco companies are increasingly switching to so-called cessation products. Thus, e-cigarettes, vape products and tobacco heating technologies work as switching or exiting tools to help end the era of traditional cigarettes.
It should be noted that the change in business models of Big Tobacco companies is not limited to the development of new technologies. The management of the largest tobacco giants sees the hemp industry as a lifesaver that will help them get rid of the downtrend in sales of tobacco or its derivatives.
Naturally, the development of such trends, large tobacco companies not only monitor, but also invest significant investment resources in this segment of modern cannabis farming. Specifically, in 2016, Philip Morris International invested $ 20 million in the Israeli pharmaceutical company Syqe Medical, which developed a medical hemp inhaler.
In 2018, British tobacco transnational Imperial Brands invested in Oxford Cannabinoid Technologies (OCT), a biopharmaceutical company that researches, develops and licenses cannabinoid-based compounds and treatments. Along with Imperial Brands, the investment fund Casa Verde Capital has also invested in OCT.
The Altria Group tobacco company acquired 45% of the Canadian cannabinoid company Cronos Group for approximately $ 1.8 billion in 2018.
In 2019, Imperial Brands announced a $ 123 million investment in the Auxly Cannabis Group, a Canadian company that develops, manufactures and distributes hemp products to health and wellness consumers.
In 2021, British American Tobacco (BAT) launched its first CBD vaping product, the VUSE CBD Zone. In the same year, BAT's corporate venture arm, Btomorrow Ventures, invested $ 25 million in Trait Biosciences, a cannabinoid research company specializing in cannabidiol-based drinks.
Commentary of the specialists of the Association "Ukrainian technical hemp"
Big Tobacco's interest in the hemp industry goes beyond recreational uses of the plant. For example, Imperial Brands' investment in the biopharmaceutical company Oxford Cannabinoid Technologies demonstrates its interest in the medical segment of the hemp industry.
It should be noted separately that the interest of Big Tobacco companies in the hemp industry is manifested not only in business operations, but also in lobbying the interests of the industry at various levels of government and management. For example, the Altria Group tobacco company has lobbied for the sale of cannabis in Virginia, the first time a tobacco company has lobbied for the interests of the US cannabis business at the state or federal level.