If there was any doubt that Big Tobacco is targeting the cannabis market, look no further than British American Tobacco’s recent investment in a German pot startup called Sanity Group, a company now involved in medical marijuana. BAT, with cigarette brands including Camel and Lucky Strike, among many others, secured $37.6 million for the deal, along with rapper Snoop Dogg’s venture capital company. While BAT doesn’t gain a controlling stake in the firm, it reflects the tobacco giant’s longer-term goal of establishing a beachhead in soon-to-boom markets, such as Germany, Europe’s largest economy with a population of more than 83 million. Recreational marijuana is currently illegal in Germany, but the government is moving ahead with plans for cannabis reform sooner, rather than later. As pot use increases with legalization and smoking cigarettes declines in the developed world, BAT and other industry leaders such as Philip Morris and Altria, are looking to diversify into other addictive substances to maintain growth. Last year, BAT—one of the world’s largest tobacco companies—bought a stake in a Canadian cannabis producer, and invested in vaping companies and a marijuana-tech outfit. While the marijuana industry portrays legalization (at least in the U.S.) as a grassroots movement aimed at social equity and criminal justice reform, Big Tobacco—along with big beverage and food companies—is eyeing the market as a new source of revenue and profit at the expense of public health.
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