British American Tobacco invests $10 million in CBD pharmaceuticals.
British American Tobacco invests $10 million in CBD medications – [News Source]
British American Tobacco Collaborates with Charlotte’s Web on CBD-Based Drug for Neurological Disorder
British American Tobacco (BAT) has made significant investments in the cannabis industry, this time partnering with CBD company Charlotte’s Web to develop a drug for a neurological disorder.
A joint venture has been formed between BAT subsidiary AJNA BioSciences PBC and Charlotte’s Web, in which BAT had previously invested. The venture aims to seek approval from the U.S. Food and Drug Administration (FDA) for a hemp extract-based treatment. AJNA has invested $10 million in the deal, with Charlotte’s Web and AJNA each owning 40% of the entity, and BAT controlling the remaining stake, according to a statement.
Investing in CBD as an Alternative to Tobacco
Tobacco companies, including BAT, are increasingly looking to invest in the cannabis industry as they seek to move away from traditional tobacco products such as cigarettes. BAT has also invested in Canadian cannabis company OrganiGram and German cannabis company Sanity Group, joining forces with Snoop Dogg’s Casa Verde Capital.
Despite the medicinal potential of marijuana, few companies have actively pursued the development of FDA-approved drugs. Currently, only one such drug, GW Pharma’s Epidiolex, has gained FDA approval. (However, the FDA has also approved three synthetic cannabis-related drugs.)
Owen Bennett, an analyst at Jefferies, commented, “The prospect is attractive given that the Epidiolex drug, which is made from CBD and used to treat epileptic seizures, generated sales of $740 million last year.” The influx of investment from major tobacco companies provides a much-needed boost to an industry facing challenges such as low wholesale prices, political obstacles, and intense competition, including illegal marijuana growers.
The joint venture between BAT and Charlotte’s Web will commence clinical development this year, focusing on a new CBD drug described as a “botanical medicine to treat a neurological condition.” Specific details regarding the targeted condition have not been disclosed by BAT. Following the announcement, shares of Charlotte’s Web rose by as much as 21%, while BAT shares saw an increase of up to 1.5%.
Source: Bloomberg.com (EN)
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