Canadian cannabis stocks jumped after spending most of the day in the red, rising after a report that tobacco company Altria Group Inc. is in talks to acquire a stake in Aphria Inc.
Aphria (APH.TO) shares jumped 15.15 per cent - or $2.64 - to close at $20.06 on Wednesday, following the Globe and Mail report, which cited unidentified sources who said Altria has expressed an interest in acquiring a minority stake in the cannabis producer but talks could still fall through. Altria shares jumped as much as 2.2 per cent on the news, but closed the day down 0.30 per cent - or 19 U.S. cents - at US$62.91.
Altria (MO.N) said in September that while it intends to “continue to comply with federal law,” it was exploring options and was “mindful of the possibility that in the future cannabis may no longer be illegal under federal law.” Representatives for Altria declined to comment on the report; Aphria couldn’t immediately be reached for comment.
Aphria responded to a request from the Investment Industry Regulatory Organization of Canada on Wednesday, stating that "there is no agreement, understanding or arrangement in place with a potential investor at this time."
Philip Morris International, citing potential risks to its reputation and regulatory hurdles, recently said it had no plans to enter the cannabis business.
In the wake of the report, the Horizons Marijuana Life Sciences Index ETF (HMMJ.TO), the largest exchange-traded fund that tracks the cannabis industry, gained 2.5 per cent. Canopy Growth Corp. (WEED.TO) added 2.3 per cent and Aurora Cannabis Inc. (ACB.TO) rose 1.6 per cent.
- with files from BNN Bloomberg
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