But don’t let the title fool you.
Some weeks ago, in our second post only here on the Smoke blockchain, we reported that Altria — parent company to Philip Morris and thus also Marlboro — would invest $1.8bn in Canadian cannabis company Cronos. Like many we expected a corporate take over of the ever growing market and who else was better placed than Big Tobacco with its huge war chests.
Earlier this week, the CEO of Philip Morris Andre Calantzopoulos, joined the party with a rather unexpected and interesting “plot twist” and announced that right now the cigarette giant isn’t interested in investing in the cannabis market because the time isn’t right.
Cannabis Marlboro cigs... not yet - Source: unknown, via the Internet
Calantzopoulos stated three major reasons and we also translated them for you:
- Different international regulations would make entry challenging for Philip Morris, both logistically and reputationally.
(Translation: When we join the party it’s all or nothing, we don’t do things half)
- The CEO pointed at lacking science and a need for a better understanding of cannabis in order to properly assess the potential.
(Translation: We think he meant that true to tradition there is no evidence about an addictive factor satisfactory to the wishes and dreams of tobacco giants)
- Philip Morris is focused on its IQOS brand
(Translation: The Marlboro Man doesn’t give up and eventually succeeds)
From a strategic point of view, all that obviously makes sense and it isn’t because the Altria umbrella parent corporation invested that its subsidiaries need to follow.
But looking deeper at the elements mentioned, there is still an interesting strategy to be noted, especially because of the mentioned focused on the IQOS brand.
The IQOS e-cig
In our previous post we actually mocked IQOS and it is true that the company has struggled with the roll out of the product, especially in Japan where Philip Morris has encountered challenges producing sufficient supply.
At the same time, continuing focus on the IQOS brand allows Philip Morris to change its image by an explicit commitment to less harmful products than its chemically flavored nicotine. By reimagining itself, with a new international brand, relying on the e-cigarette trend Philip Morris is still well-placed to enter the vaping market at a later stage. Potentially even with slightly adapted IQOS heaters/vaping cigs. Marijuana is still an obvious evolution if a tobacco major wishes to move away from the harmful and burnt chemical sticks.
In the meantime, legalislations in many major nations could progress as well as the scientific evidence pro-cannabis. All while Philip Morris could potentially investigate how to incorporate marijuana within its IQOS strategy.
As Calantzopoulos himself said: the time isn’t yet right.
Disclaimer: In a past life I have worked for the agency which historically grew with the Marlboro brand, and vice versa. I can totally confirm the translation to the first point. In one of my first interactions with the national Marketing Manager for Marlboro I raised the issue of cost for a potential concept and the reply was “We are Marlboro, money is not an issue. If we need to pay to make it a success, we pay.” I never hesitated proposing expensive concepts anymore. :D