A rising tide was lifting all pot stocks Friday after cigarette maker Altria Group (MO) - Get Reportinvested $1.8 billion (C$2.4 billion) in Canadian cannabis company Cronos Group (CRON) - Get Report , sending the stock jumping more than 30%.
Altria also has options that if fully exercised would result in an additional $1.05 billion (C$1.4 billion) in proceeds for Cronos in exchange for an extra 10% stake for Altria.
Altria shares were rising 0.4% while Cronos shares jumped 22.2%.
"Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth," said Cronos Group's Mike Gorenstein, chairman, president and CEO. "The proceeds from Altria's investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers."
Fellow pot stocks also were benefiting from the deal in early trading Friday.
This is the second major pot partnership to be confirmed in recent months after beer maker Constellation Brands Inc. (STZ) - Get Reportpaid $4 billion to boost its stake in Canopy Growth to 38%. The company also purchased warrants giving it the option to increase that to a majority stake in the future, much like the structure of Altria's deal.
In other pot news, Aurora Cannabis announced that it established an exclusive partnership with Farmacias Magistrales SA, and established Mexican pharmaceutical manufacturer. The partnership is the first an only import license granted by the Mexican government to date, according to Aurora.