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Philip Morris CEO:
We need to find cigarette alternatives
A CNBC interview at Davos yesterday with André Calantzopoulos, CEO of Philip Morris International, reveals that the company that sells Marlboro outside the US believes it “needs to find cigarette alternatives.”
In 2003, Philip Morris Companies changed its name to Altria, some say to distance itself from its historical association with tobacco. Five years later, Altria split off Philip Morris International, which handles all Philip Morris production and sales globally but not in the US.
Philip Morris International has heavily invested in the development of an e-cigarette device called iQOS, which is used by 4 million people in 30 global markets. iQOS must be approved by the US Food and Drug Administration before it can be marketed here.

Calantzopoulos told CNBC that one billion people continue to smoke, including 40 million in the US, and his company believes it must give them better alternatives than cigarettes.
See video interview here.

Tobacco giant Altria takes 35 percent stake in JUUL, valuing e-cigarette company at $38 billion
Last month, Philip Morris International’s stateside partner, Altria, invested $12.8 billion for a 35 percent share of JUUL, the e-cigarette device treasured by teenagers. JUUL has captured some 75 percent of the e-cigarette market in just three years, most of it in the past year.
Public Health officials, including FDA Commissioner Scott Gottlieb and Surgeon General Jerome Adams, say e-cigarette use is epidemic among adolescents, and they blame JUUL’s marketing practices for it.
As part of the agreement, Altria will give JUUL shelf space, so JUUL pods will be sold right next to Marlboro cigarettes. Altria will also help JUUL distribute its pods through Altria’s 230,000 retail outlets in the US.
Ironically, JUUL started out as an anti-tobacco concern, promoting its pods to encourage cigarette smokers to switch to vaping. But its marketing practices mirrored those of the tobacco industry, producing flavored pods that appeal to kids. By relying for its growth on teenagers who have never smoked but are now addicted to nicotine, JUUL may have created a new generation of smokers.
The tobacco industry’s quest for nicotine delivery systems that don’t involve smoking is in some ways analogous to the marijuana industry’s product development. While that industry would never admit that smoking pot is harmful, it pursues alternative ways to get high, including a bewildering array of edibles. Can nicotine edibles be far behind?
Actually, yes. Two days ago, Forbes announced that Altria has agreed to finance research of one of its subsidiaries, Lexaria Nicotine LLC, in exchange for exclusive license rights to sell “regulatory compliant, oral forms of nicotine” products in the US.
Read CNBC story here.

Altria to invest $1.8 billion in cannabis company Cronos Group, exits some e-big brands
Will marijuana smoking among high school and middle school students give way to marijuana vaping like cigarette smoking has?
Altria appears to be hedging its bets. Last month, the company announced it is investing $1.8 billion in the Canadian marijuana company Cronos Group for a 45 percent share. Cigarette sales have slowed, and its customers have turned to other products like e-cigarettes and marijuana.
Cronos Group says the deal will help it expand its infrastructure and distribution in Canada and the US if the federal government fully legalizes the drug. It will also enable Cronos to learn how to deal with regulatory issues. Cronos appreciates Altria’s expertise with e-cigarettes and sees an opportunity to customize marijuana vaping products for e-cigarettes.
The deal will allow Altria to obtain up to 55 percent of the company at the guaranteed rate of $19 a share.
Pictured below is a line of products Cronos makes for medical use.
Read CNBC article here.

The Marijuana Report is a weekly e-newsletter published by National Families in Action in partnership with SAM (Smart Approaches to Marijuana).

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