Cronos stock (NASDAQ:CRON) was soaring Monday afternoon as Altria (NYSE:MO) is reportedly in talks to acquire the cannabis producer as the Marlboro cigarette maker hopes to reach another group of smokers.
The news was unveiled Monday by a person familiar with the matter, who informed CNBC on the matter. As of now, Cronos has yet to agree to any deal and there are no signs that suggest whether or not the company is planning on accepting the proposed deal.
Altria has also been seeking to assume a minority position in e-cigarette company Juul, according to a source familiar with the matter. It is unclear whether or not Altria’s plans to pursue an acquisition of Cronos would have any effect on its potential stake in Juul.
The move makes sense for Altria considering an increase in the number of campaigns pushing consumers away from cigarettes, as well as a reduction in cigarette smokers due to to older smokers dying. Cigarette sales have been sliding in recent years, while cannabis and e-cigarette businesses are on the rise as younger generations opt for vaping and the medical benefits of marijuana.
The marijuana industry is expected to be worth roughly $52.5 billion, including both legal and illegal sales of the plant.
CRON stock was up about 11.2% during regular trading hours on Monday afternoon following the news. The company’s stock fell nearly 0.6% after hours. MO shares were up about 1.6% during regular trading hours on the news and the stock was unmoved after the bell.
