Why One Of The World’s Biggest Cigarette Makers Is Not Getting Into The Cannabis Industry

Source from:  Yahoo Finance 12/24/2018

It’s a no go on the red-hot cannabis industry right now for cigarette giant Philip Morris International (PM).

“We have no current plans for the cannabis business,” CEO André Calantzopoulos told Yahoo Finance. “We have enough on our plate for the moment to enter other categories.”

Philip Morris International was spun off from Altria in 2008, and licenses names such as Marlboro to sell overseas. The company operates in 180 countries, with Japan and the Middle East being important markets.

Calantzopoulos explained that there are many criminal considerations to cannabis in some of its markets. There is reputational risk, too. Philip Morris deciding to enter the cannabis business is a thornier proposition than many on Wall Street think at the moment.

Instead, Calantzopoulos said Philip Morris will focus on getting approval for its heat-not-burn product IQOS in the U.S. It also plans to widen distribution for the cigarette alternative in its international markets.

The threat of reputational risk hasn’t stopped Altria (MO) from going head on into cannabis in a bid to diversify from traditional cigarettes.

Altria earlier this month disclosed a 45% stake in Canadian cannabis company Cronos Group (CRON). The price was a lofty $1.8 billion. Altria has an option to take its stake to 55% over the next five years.  Enditem