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Anheuser-Busch InBev SA/NV
Altria Group, Inc.
Molson Coors Brewing Company
Canopy Growth Corporation
The Scotts Miracle-Gro Company
Canopy Growth Corporation
GW Pharmaceuticals plc
Cronos Group Inc.
Aurora Cannabis Inc.
Corbus Pharmaceuticals Holdings, Inc.
CannTrust Holdings Inc.
CannTrust Holdings Inc.
New Age Beverages Corporation
The Green Organic Dutchman Holdings Ltd.
The Green Organic Dutchman Holdings Ltd.
General Cannabis Corp
Terra Tech Corp.
ETFMG Alternative Harvest ETF
(Bloomberg) -- Altria Group Inc. pulled out of the e-cigarette market in the fall of 2018 because of a secret deal with rival Juul Labs Inc. -- not because of the public-health concerns it cited publicly at the time, according to U.S. antitrust officials.The Federal Trade Commission revealed the agreement between the two companies in an antitrust complaint made public Friday. The complaint cites new evidence about the negotiations between the two companies that resulted in Altria’s $12.8 billion investment in Juul in December 2018.The complaint from the FTC, which sued on Wednesday to block the deal and ordered Altria and Juul to unwind the investment, states that Altria pulled its MarkTen product from the market as a condition of investing in Juul.Juul’s “executives made clear their position that Altria could not remain a competitor in the relevant market if there was to be a deal,” according to the complaint. During negotiations, Juul insisted, “and Altria recognized, that Altria’s exit from the e-cigarette market was a non-negotiable condition for any deal.”Altria had told the Food and Drug Administration in an Oct. 25, 2018, letter that it believed kids shouldn’t use tobacco and it would remove its e-cigarette products MarkTen Elite and Apex by MarkTen from the market, and remove all flavors except for menthol and mint from its other, similar products. On Dec. 7 of that year, the maker of Marlboro cigarettes announced it was winding down the rest of the e-cigarette business. Less than two weeks later, Altria had a deal to take a 35% stake in Juul.Altria was facing intense competition at the time from Juul, which was the market leader with 70% of the market at the time, according to the FTC. The $12.8 billion investment, which Altria has since written down, eliminated competition between the two companies, leaving consumers with reduced choice, according to the FTC.Juul spokesman Austin Finan said in a statement that the company disagrees with the “factual and legal allegations” in the FTC’s complaint and “will respond through the appropriate administrative process.”“We believe that our investment in Juul does not harm competition and that the FTC misunderstood the facts,” said Murray Garnick, Altria’s executive vice president and general counsel. He said he’s disappointed with the FTC’s decision and “believe we have a strong defense and will vigorously defend our investment.”Hotel MeetingAccording to the FTC’s complaint, in August 2018, executives and board members from the two companies, including Juul’s then-Chief Executive Officer Kevin Burns and Altria CEO Howard Willard, met at the Park Hyatt hotel in Washington without any lawyers to discuss a deal. As talks continued that month, Juul made it clear that Altria had to exit the market, according to the complaint. When Altria tried to modify the non-compete terms, Juul “responded negatively and reiterated its demands,” the FTC said in the complaint.Negotiations stalled, and Altria executives knew they had to meet Juul’s insistence on not competing if talks were to restart, according to the complaint. In October, Altria’s Willard made assurances to Juul’s CEO and board members. What exactly he promised is redacted in the complaint. But Juul’s Burns forwarded Willard’s letter to Juul’s chief legal officer with a “simple note” and talks resumed.“Altria’s agreement to exit the relevant market eliminated one of JLI’s most dangerous rivals,” the FTC said, referring to Juul. “As a large, well-established, and well-funded company with long standing relationships and significant shelf space with retailers nationwide, Altria had the resources and infrastructure to drive sales and compete aggressively.”The FTC claims the companies cannot show the investment led to any efficiencies that would outweigh the lack of competition the deal resulted in. They also say the new contract the companies negotiated in January eliminated Altria’s marketing help, “further reducing the scope of theoretical benefits from the agreements.”Under the revised terms, Altria limited its help to advising Juul on a regulatory application seeking permission from the FDA to continue selling its e-cigarettes in the U.S. The changes also gave Altria a way out of the non-compete agreement should Juul’s application be denied.Altria noted that just before it announced the deal in December 2018, it said it was withdrawing its e-cigarette products for reasons other than youth appeal. It cited “the current and expected financial performance of these products,” as well as regulatory restrictions.And according to the final deal’s non-compete clause, Altria could keep competing with Juul’s products via its Green Smoke and MarkTen and MarkTen Elite brands, subject to certain conditions.(Updates with details from the complaint and background starting in the ninth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
AB InBev-owned Grupo Modelo and Dutch brewer Heineken recently suspended their Mexican operations after the country declared a health emergency and ordered the suspension of non-essential activities. Constellation Chief Executive Officer Bill Newlands said the company was not going against government recommendations. The brewer's Corona and Modelo beers have been a huge hit with consumers, especially among the Hispanic population, helping it gain market share in the United States.
Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does AbbVie (ABBV) have what it takes? Let's find out.
Constellation Brands (STZ) reports strong fourth-quarter fiscal 2020 results, driven by continued strength in the beer business and gains in the wine & spirits segment.
Aurora Cannabis (ACB) has seen solid earnings estimate revision activity over the past month, and belongs to a strong industry as well.
(Bloomberg) -- With U.S. antitrust authorities suing to reverse Altria Group Inc.’s investment in Juul Labs Inc., the Marlboro maker may be getting a chance to undo the troubled deal, according to industry analysts. They warn, however, that investors’ faith in the company may be difficult to restore.The late 2018 deal that’s being challenged by the Federal Trade Commission was supposed to combine Altria’s marketing might with Silicon Valley upstart Juul. Instead, Altria has written down the investment twice, slashing the 35% stake’s value to $4.2 billion in January as health concerns about e-cigarettes led to a regulatory crackdown. Altria originally paid $12.8 billion for the position.Altria, which wants to expand its e-cigarette market share as traditional smoking rates decline, says it will defend the deal. But maybe it shouldn’t, experts say.Here’s what analysts are saying after the FTC filed its complaint.Morgan Stanley, Pamela KaufmanAltria’s stake is now essentially a call option on Juul, Kaufman says, giving the cigarette company a potential out if Juul fails to secure regulatory approvals for its products and the rise in youth vaping fails to reverse.“Given the elevated uncertainty that Juul continues to face, we think investors would take a potential Juul divestiture in stride and could be relieved if MO were to distance itself from the company,” Kaufman wrote, referring to Altria by its stock market ticker.Jefferies, Owen BennettGiven the trial isn’t set to start until early 2021, there’s unlikely to be an outcome anytime soon, Bennett wrote. However, the FTC action will likely support investor class action lawsuits that Altria failed to investigate Juul sufficiently before going ahead with the deal.“We have spoken to a number of investors that have said they won’t invest in MO with current management, their credibility taking a big dent following the Juul investment,” Bennett said. Their concerns focus on Altria taking a stake in spite of reports of teenage usage, “therefore allegations of anti-competitive behavior alongside this is likely to dent confidence further.”Bennett notes that Altria’s other recent investment of $1.8 billion for a 45% stake in cannabis company Cronos is now only worth $800 million.Bernstein, Callum ElliottThe FTC challenge “introduces even more risk/uncertainty into an already clouded outlook,” Elliott said. If Altria is forced to unwind its investment it could leave the company with no exposure to vaping, since it already discontinued its own e-cigarette business, he said.That could force it to do yet another deal for access to vaping products. “Investors with whom we speak shudder at the thought of yet more M&A and capital mis-allocation after the Juul debacle,” Elliott wrote.Citigroup, Adam SpielmanIf Altria is forced to sell its stake in Juul, it would undermine the company’s stated strategy to lead smokers to switch to non-combustible products. Altria lacks the research and development capabilities to develop a substitute, Spielman said in a note to clients.Altria would likely be forced to ask Philip Morris International Inc., which sells the Marlboro brand overseas, for a license for its Mesh e-cigarette product, Spielman said. “The trouble is it is unclear when Mesh will be authorized for U.S. marketing, what terms MO would be able to negotiate, or even how good the product is,” he said. “MO would also end up being even more dependent on PM.”Stifel, Christopher Growe“It is not clear to us how this transaction can be unwound.” At the same time, the steady drumbeat of negative headlines around Juul over the last year means that if Altria is forced to divest its stake, it’s unlikely to impact earnings or share performance.“We believe some investors view this stake negatively –- as a potential albatross for Altria,” Growe said. “To that end, unwinding the transaction would be welcome news for many of those investors.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The U.S. Federal Trade Commission said on Wednesday it had filed a complaint aimed at forcing Marlboro maker Altria Group to sell its investment in e-cigarette maker Juul Labs Inc. The FTC has probed Altria's decision to buy a 35% stake in Juul, announced in December 2018, for $12.8 billion. The value of the investment has dwindled to $4.2 billion, following a series of writedowns last year, as Juul faced litigation and heightened regulatory scrutiny over its contribution to a surge in teenage vaping.
AbbVie (ABBV) stock popped on Tuesday. This is part of the global pharmaceutical giant's larger 20% surge in the last week as the market tries to mount a comeback amid the coronavirus uncertainty...
Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does Scotts Miracle-Gro (SMG) have what it takes? Let's find out.
(Bloomberg Opinion) -- Lloyd Bridges’s character in the disaster comedy “Airplane” captured it quite well when he said, “Looks like I picked the wrong week to quit smoking.” It’s a sentiment shared by people locked down around the world. While demand for most everything outside of food and toilet paper has declined, cigarettes are holding up.In an environment where companies are ditching their profit guidance left, right and center, Imperial Brands Plc, which makes Kool and Gauloises cigarettes, said on Tuesday that so far the virus had had no material impact on performance and trading remained in line with expectations. That echoes comments two weeks ago from British American Tobacco Plc. Shares in Imperial rose as much as 15%In the coronavirus-induced consumer crisis, big tobacco is certainly living up to its defensive reputation.After all, if people are addicted to nicotine, they still need their fix. And the pandemic-stricken world we live in provides incentives to light up more often: Anxiety induced by ever-grimmer headlines; the fact that local stores selling cigarettes are still open; and the ease with which you can take a fag break when working from home as opposed to having to step outside the office.But it’s not unqualified good news for the industry.Imperial, which also makes Golden Virginia tobacco, said that its factories were building contingency stocks, and its Logista distribution business serving Italy, France and Spain was doing the same to ensure supplies could get through to retailers. It’s also possible that as with rice and pasta, consumers are stockpiling cigarettes in case of even more stringent isolation measures down the road. So some demand may have been pulled forward, meaning this uptick might not be sustained in the long term.What’s more concerning is a recent focus on the increased risk of Covid-19 to smokers, and whether that may encourage more people to quit once the crisis has passed. Reports that the state of New York was in discussions about potentially banning cigarettes made headlines, but Bloomberg News reported on Monday that consideration of a ban was “100% not true.”Still, a renewed focus on personal health, especially where everyone’s lungs are concerned, would likely hurt cigarette sales in the future. These are all challenges tobacco companies will have to grapple with as they race to find what alternative product will drive growth if or when the world does kick its cigarette habit. The industry was already working to get past questions about health risks around vaping, which was last year linked with a spate of cases of respiratory illness. Groups including BAT, Altria Group Inc. and Philip Morris International Inc. have invested billions of dollars in electronic cigarettes and devices that heat rather than burn tobacco. Altria took a 35% stake in vaping leader Juul Labs Inc., which it has now written down. Right now, though, with the prospect of economic conditions deteriorating, tobacco’s resilience in the face of recession should come to the fore, especially given that traditional cigarettes remain the industry’s most profitable product. Smokers may trade down if money becomes tight, or switch to rolling their own cigarettes. But Duncan Fox, an analyst at Bloomberg Intelligence, says that even then pure tobacco has higher margins.So from a position a few months ago, where vaping sales were under pressure, but there were worries about an accelerated decline in smoking traditional cigarettes too, Big Tobacco’s core business now looks to be on a surer footing. That’s bad for public health, and for those funds that choose not to invest in cigarettes. But at least it can help preserve the industry’s profits and chunky dividend payouts for investors, when those at many other companies are suffering.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Cronos (CRON) delivered earnings and revenue surprises of -75.00% and -36.86%, respectively, for the quarter ended December 2019. Do the numbers hold clues to what lies ahead for the stock?