LONDON, March 11 — British American Tobacco today said it had bought around one fifth of Canadian licensed cannabis producer Organigram, as the traditional cigarette sector comes under increasing pressure over health concerns.
BAT said in a statement that it has acquired 19.9 per cent of Organigram for about £126 million (RM 719.5 million).
“Through the collaboration, BAT will gain access to… product innovation and cannabis expertise, complementing BAT’s extensive plant-based expertise and development capabilities,” it added.
Cannabis was legalised in Canada for recreational use in 2018.
Companies like BAT are looking to revenue streams elsewhere, such as e-cigarettes, to counter falling demand for traditional tobacco products in Western markets that face also high taxes and public smoking bans.
BAT scientific research director David O’Reilly today said the company’s “multi-category, consumer-centric approach, which is key to our transformation, aims to provide choice and meet the evolving needs of adult consumers”.
He added: “This choice provides reduced risk alternatives to combustible cigarettes, as well as going beyond tobacco and nicotine into new and exciting areas of product innovation.”
The tobacco sector was hit by a large outbreak of e-cigarette linked lung disease in 2019, which prompted the US government to make legal changes to curb youth vaping. — AFP