Altria Group Inc., one of the largest tobacco manufacturers in the nation, continues to expand their reach into other markets as the company invests more into noncombustible products. The company has invested in a oral nicotine delivery system with a Canadian developer.
Through a subsidiary, Altria has agreed to a deal in research and development which could potentially turn into a $12 million investment. Altria Ventures Inc. will be working with the Lexaria Bioscience Corp. subsidiary, Lexaria Nicotine LLC, to go after innovation of “oral nicotine-delivery consumer products”.
The research that will be conducted would involve the patented technology of Lexaria called DehydraTech. According to Lexaria officials, the technology enhances compounds in four “ingestible” categories. The categories include smell and taste, bio-availability, bi-absorption and speed of action.
There will be an initial investment of $1 million from Altria, which could potentially lead to the $12 million investment by using private, multi-phased financing.
Under the deal, Altria is allowed to use the patented technology of Lexaria on an exclusive basis in the U.S. for oral nicotine delivery. Globally, the technology can be used on a nonexclusive basis.
This is one of a few investments Altria has made within the last few weeks. Not long ago, the tobacco manufacturer invested $12.8 billion to purchase minority stakes in Juul Labs, one the largest e-cigarette makers. Altria has also recently invested $1.8 billion for 45% equity stakes into the cannabis producer and grower out of Toronto, Cronos Group. By making these investments, the tobacco company is increasing their expansion into other market areas.
As the number of people who smoke cigarettes has decreased over the years and still continues to decrease, it is smart of Altria to begin seeking stakes in other nicotine categories.