Big bad tobacco (BBT) There have been some recent discussions on whether Tilray Brands could be a takeover target. I have no doubt that BBT is interested in cannabis as a potential lifeline, but do wonder whether they will actually buy the cannabis producers and mothball the production/packaging, or simply purchase cannabis from contracted growers as they do with tobacco.
Philip Morris sold 110 billion heated tobacco units in 2022, which are functionally equivalent to dry herb vapourizers. Their newly released "Veev Onel nicotine vapourizer could also contain THC.
Although Tilray could benefit as a wholesale supplier of cannabis to tobacco companies, their margins will undoubtedly be compressed. A high quality cured tobacco (Pennsylvania Seedleaf) is $3 per pound. That equates to 0.66 cents per gram, which is much less than Colombian marijuana @ 6 cents per gram. Admittedly totally different crops, but both are labor intensive.
Will tobacco companies choose vertical integration for marijuana instead of their traditional, profitable and risk-free model of squeezing contracted growers? My guess is as good as yours.