British American Tobacco (BAT), UK’s biggest tobacco firm, is eyeing increased investments in cannabis as it tries to shift away from selling traditional cigarettes. The tobacco firm says that it wants to “accelerate” its transformation by reducing the health impact of its products, reports the BBC.
The firm has also signed a deal to research a new range of cannabis products, whose initial focus will be on cannabidiol (CBD).
BAT chief Jack Bowles told Radio 4’s Today programme that the firm sees cannabis-related products as part of its future growth strategy and that BAT is currently trying out a CBD vape product in Manchester.
Tobacco firms across the world are moving away from nicotine products.
Tobacco giant Philip Morris, which makes the Marlboro cigarettes, said it could stop selling cigarettes in the UK in 10 years as it focuses on alternatives.
BAT chief Jack Bowles said, “As we think about our portfolio for the future, certainly beyond nicotine products are interesting for us as another wave of future growth."
Profits move elsewhere
BAT reported half-year profits in the end of June in which it reported 8.1% rise in revenues. The tobacco giant said that more than a third of its UK revenues now come from vaping brands.
BAT saw its fastest gain in new customers with use of vapes and other non-combustible products rising from 2.6 million to 16.1 million.
Even though Big Tobacco is planning a transition away from cigarettes in the UK and other developed nations, cigarettes remain its prime mover in developing countries. Cigarette sales for tobacco giants recovered significantly following the end of COVID-19 induced lockdowns in some countries.
William Ryder, an equity analyst, told the BBC that for now BAT is still dependent on cigarettes. “Traditional tobacco products still pay the dividend, and will do for some time,” Ryder said.