Marlboro cigarette maker Altria Group Inc. is in early stage talks to acquire Canadian cannabis producer Cronos Group Inc., as it seeks to diversify its business beyond traditional smokers, people familiar with the matter said on Monday.
Canada this year legalized recreational use of marijuana and is seen as a testing ground for pot companies that expect to expand globally as other countries follow suit.
Cronos has not agreed to any deal and there is no certainty it will do so, the sources said. The discussions between Cronos and Altria are expected to last for several weeks, one of the sources added.
The sources asked not to be identified because the matter is confidential. Altria did not immediately respond to a request for comment, while Cronos declined to comment.
Cronos shares listed on the Nasdaq rose 23 percent to $11.32 in Monday afternoon trading after Reuters reported on the deal talks, giving Cronos a market value of more than $2 billion.
Other Canadian cannabis stocks also jumped. Tilray Inc. shares rose 4 percent, while New Age Beverages Corp shares soared 10 percent. [Read more at St. Louis Post-Dispatch]