Briefing

Tobacco giant Imperial Brands investing $123 million in Vancouver cannabis company

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Imperial will take a 19.9 per cent ownership stake and one of five board seats at Auxly Cannabis. Auxly gets the rights to Imperial’s vaping technology. Auxly’s shares were up 21.92 per cent in late afternoon trading. (The Logic)

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Talking point: This is the second large tobacco company to invest in a Canadian cannabis firm following Altria’s $1.8-billion investment for a 45 per cent stake in Cronos Group, with the ability to take that stake up to 55 per cent. The focus on vaping will put Auxly in direct competition with Canopy Growth, which has made a series of acquisitions in recent months to focus on non-traditional cannabis products. Cannabis edibles, including vaping liquid, will become legal on October 17. It’s not just Cronos and Auxly looking to get in on the space, though. In October 2017, Aurora Cannabis was the first producer to launch a vape-ready CBD oil. Tilray partnered with brewing company Anheuser-Busch in December 2018. However, all these companies may see their product-rollouts delayed. Health Canada expects only a limited number of non-traditional cannabis products to be available “no earlier than mid-December.”