One of the world's largest tobacco companies is teaming up with a popular CBD manufacturer to seek federal approval for a new cannabis medicine.
Charlotte's Web, a self-described “market leader in full-spectrum hemp extract wellness products,” just announced that it is collaborating with AJNA BioSciences PBC to create a “novel botanical drug” that will be largely derived from hemp. AJNA is a subsidiary of British American Tobacco (BAT), a global conglomerate that produces Camel, American Spirit, Newport, and many other popular cigarette brands.
The partners explained that their new joint venture is specifically focused on obtaining FDA approval for a mysterious new botanical medicine. Backed with $10 million in initial funding from BAT itself, the joint venture plans to file an Investigational New Drug ("IND") application with the FDA and begin Phase I clinical research on their new product before the year is out.
"As one of the first clinicians to research novel cannabinoids, I am very excited to work on this project,” said AJNA Chief Medical Advisor Dr. Orrin Devinsky, MD, PhD, in a statement. “I believe the properties of cannabis and hemp are well suited for the FDA's new Botanical Drug Development pathway.”
The partners have yet to disclose any actual details about what this drug is and what it will do, though. The press release notes that the new product will “target a neurological condition,” but does not even suggest what condition they are seeking to treat. This experimental drug will reportedly be developed using “certain proprietary hemp genetics” from Charlotte's Web, but the company has not indicated exactly which cannabinoids will be involved.
Despite the scant details, the partnership highlights a growing interest from tobacco companies to invest in the cannabis sector. Cigarette profits have been plunging over the past decade, a decline that has closely coincided with the explosion of adult-use cannabis sales. Tobacco and alcohol companies first sought to fight the spread of cannabis legalization by funding anti-legalization groups, but after realizing the inevitability of reform, soon started investing their cigarette profits into the weed industry.
British American Tobacco was one of the first major tobacco companies to jump head-first into the cannabis space. In 2021, BAT spent a cool $175 million to buy a 20% stake in Organigram, a legal Canadian cannabis producer. Later that year, company executives told the press that they intend to make legal cannabis products a major part of their future. At first, the company intends to focus on hemp-derived wellness products – like the mysterious product they are developing with Charlotte's Web – because the UK and the US still prohibit recreational cannabis.
Altria, producer of Marlboro and other popular smokes, beat BAT to the punch in 2018, when it acquired Cronos, another Canadian cannabis firm, for $1.8 billion. Philip Morris also dipped its toes into the cannabis industry in 2021 by investing $20 million into an Israeli medical marijuana firm. Meanwhile, major alcohol corporations have also seen the writing on the wall and started pouring their profits into legal weed investments. Constellation Brands, maker of Corona beer, and Molson Coors have also launched mergers and joint ventures with major players in Canada's legal weed market.
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