Tobacco aims higher

Altria Group and Reynolds American may soon take another look at U.S. business opportunities in the production of marijuana-related products, according to Bloomberg Intelligence’s senior tobacco industry analyst, Kenneth Shea.

Twenty-three states and Washington DC allow marijuana in some form, and at least 14 additional states are considering marijuana legalization this year.

Altria and Reynolds already have their cigarette manufacturing scale, knowledge of managing similar regulatory and legal risks and possible similar production supply chain, Shea noted.

If the federal government legalizes recreational marijuana, key opportunities for Altira and Reynolds would include the potential to leverage their scale of production, political influence and brands to the marijuana market, the analyst wrote.

Threats, he added, would include a decline in cigarette use, a proliferation of competing vapor devices and THC-containing liquids, and the pharmaceutical industry’s likely interest in making THC-delivery products.