Philip Morris International, the world’s largest tobacco company by market capitalization, is expanding its presence in the cannabis industry through its subsidiary, Vectura Fertin Pharma. The company has announced a collaboration with Avicanna, a Canadian biopharmaceutical firm specializing in cannabinoid-based medicine, to advance medical cannabis research and improve accessibility in Canada.
This partnership marks a continuation of Philip Morris’s calculated strategy in the cannabis sector, with a focus on medical applications over recreational cannabis. The company’s interest in medical cannabis aligns with its broader strategy of research-driven innovation.
Philip Morris’s approach to cannabis differs from its competitors, such as Altria and British American Tobacco, which have taken more consumer-oriented paths. While Altria invested $1.8 billion in Cronos Group and BAT formed a CAD 125 million R&D partnership with Organigram, Philip Morris has focused on medical cannabis as a cornerstone of its diversification strategy.
The collaboration with Avicanna adds to the company’s history of notable partnerships. Avicanna has prioritized research and development (R&D) and clinical studies over consumer-driven recreational markets since its inception. The company has also maintained long-term commitments to advancing cannabinoid-based therapeutics and developing evidence-based solutions for patients.
Some analysts view the collaboration as a potential precursor to an acquisition, while others believe it could be a strategic move to gain insights into patient-focused care and market dynamics in Canada. The partnership positions Avicanna as a key partner for multinational firms, and by focusing on medical cannabis, Philip Morris avoids the risks of recreational markets while laying the groundwork for long-term diversification.
In the long term, Philip Morris’s ambitions likely extend to the U.S., where the company is waiting for regulatory clarity to enter the market. The collaboration with Avicanna is a significant step towards this goal, and traditional CPG companies are increasingly integrating cannabis into their portfolios.
Disclosure: The author does not own shares of any of the companies mentioned in this article, their peers or competitors. Furthermore, the author does not intend to initiate any positions in these stocks within 72 hours of publication.
