Imperial Brands (LON:IMB), one of the world’s largest tobacco companies has bought a minority stake in Oxford Cannabinoid Technologies (OCT). Shares in the company rose as a result:
This investment is considered one of the “most significant” yet by a tobacco company in the cannabis industry. Snoop Dogg’s venture capital firm Casa Verde also participated in the Series A fundraising round for OCT.
Imperial Brands owns Winsten and Maverick, Kool, and Salem cigarettes and adds its name to a growing list of companies exploring opportunities from a booming industry. Recently Molson Coors beer company also signaled its move into the cannabis industry as it held discussions with Aurora Cannabis (ACBFF:OTCQX) and Aphria (APHQF:OTCQB) about investing and creating cannabis-infused beverages.
Declining cigarette sales may be another reason for Imperial to diversify its product line. It also recently invested heavily into its range of vaping products to feed a growing demand in that sector.
Imperial Brands and Oxford Cannabinoid Technologies
Oxford Cannabinoid Technologies is a UK-based startup focused on researching cannabinoid compounds used for effective drugs or medical treatments. Like other research-stage biotech companies, it’s aim is to develop intellectual property around these newly found compounds.
The more established GW Pharmaceuticals recently created Epidiolex— a marijuana-based epilepsy drug. Epidiolex was approved by the Food and Drug Administration only last week; a move which has “opened doors” for research around cannabinoids found within the marijuana plant. OCT seeks to mimic this type of success.
Previously endorsed by actor Patrick Stewart, OCT raised nearly £10 Million (though the actual figure has not been publicly disclosed) from Imperial and Casa Verde Capital.
Matthew Phillips, chief development officer of Imperial Ventures said on the matter: “We are pleased to be partnering with OCT…Cannabinoid products have significant potential and our investment enables Imperial to support OCT’s important research while building a deeper understanding of the medical cannabis market.”
The growth of the cannabis market is really only at the beginning; Canada has just legalized recreational marijuana, and many major markets in Germany, Australia, and Poland along with 30 US States are only a step behind having legalized medical cannabis.
Featured Image: ImperialBrands