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Altria is considering including cannabis as well as caffeine pouches in its offering of non-nicotine products as part of its growth strategy.
The Big Tobacco firm has shown interest in cannabis previously, such as in 2018 when the group invested $1.8bn in a 45% stake in Canada’s hemp company Cronos Group, but the new announcement represents a significant step forwards as it confirms the company is interested in getting involved in the industry itself.
Altria has been focused on understanding why consumers use certain tobacco products to “elevate certain everyday moments” in order to “detatch or engage with the world around them”, according to Altria group’s chief innovation and product officer, Olivier Houpert.
It is now looking at alternatives to tobacco that may address the same needs as it looks towards its smoke-free ambitions.
“As we look to the future, we see opportunities to build on this knowledge to identify non-nicotine products that could satisfy these same moments,” Houpert said. “Cannabis products are one such example, but we’re also expanding our lens to a broader consumer base to understand other everyday moments that could be elevated through non-nicotine products.”
Exploring opportunities beyond nicotine
According to a report published by the Wall Street Journal, Altria’s chief executive officer Billy Gifford said that the group is also considering caffeine pouches as an option for its future non-nicotine offer.
Altria said that it expected to finalise its strategies for these potential areas of growth in the next 12 months and that it would announce its goals for each of them once they are established.
“We announced our aspirations to compete in the international innovative smoke-free and non-nicotine categories,” the company said in a statement released after a meeting with investors. “We believe the international smoke-free and non-nicotine categories combined represent multi-billion dollar opportunities for us,” it added.
Speaking at the investor event, Houpert said that while exploring growth opportunities beyond nicotine, the tobacco giant could “create incremental value through non-nicotine adjacency strategies”.
Altria’s reference to cannabis products was made at the group’s latest investor day conference at the New York Stock Exchange on 23rd March.
Surviving the Juul blow
The maker of cigarette brand Marlboro also announced its 2028 enterprise goals, including volume and revenue targets in the shift towards a smoke-free offering.
Altria said it aimed to increase its sales of such products by 35%, as well as to double its revenue from them to $5bn in the next five years. The company said its targets assumed the completion of the acquisition, announced earlier this month, of e-cigarette maker Njoy for at least $2.75bn.
The agreement followed the group’s decision to divest from Juul Labs after its stake in the vaping company dropped significantly over the past four years.
This made many believe that Altria’s announcement that it was looking at new opportunities involving cannabis and caffeine came as an attempt to survive the blow inflicted by the fall of Juul.
As well as investing in the Cronos Group, two years ago the Marlboro cigarette manufacturer also called for a federal legalisation of cannabis in the US.
Altria is not the only Big Tobacco industry player to have included cannabis in its diversifying strategies while transitioning towards a smoke-free offering. British American Tobacco (BAT) owns stakes in Canadian cannabis company Organigram and it invested in German medical hemp company Sanity as well as in US-based CBD maker Charlotte’s Web in 2022.
– Tiziana Cauli CannIntelligence staff
