Big Tobacco makes its initial bid for the cannabis market
Late last month, a subsidiary of U.K.-based tobacco giant Imperial Brands (NASDAQOTH:IMBBY), the company behind the Kool and Winston cigarette brands, announced that it had joined with seed investment firm Casa Verde, which is backed by rap musician Snoop Dogg, to invest in British medical marijuana research firm Oxford Cannabinoid Technologies. Casa Verde’s $10 million investment is one of Oxford Cannabinoid Technologies’ largest to date. Conversely, it’s also one of Casa Verde’s largest investments, given that Snoop Dogg’s cannabis-based venture capital firm tends to offer $1 million to $3 million to seed companies in the ancillary cannabis space. Imperial Brands’ stake wasn’t disclosed.
OCT, as the company is also known, has also received backing from British actor Patrick Stewart. Known for his role on Stark Trek: The Next Generation and the X-Men movie franchise, Stewart has long been an advocate of medical marijuana research in the U.K. and plans to serve on OCT’s advisory board. OCT will be focused on developing and researching cannabinoids that can be used to treat specific ailments.
Notably, Imperial Brands announced this investment just three days after the U.S. Food and Drug Administration approved GW Pharmaceuticals‘ (NASDAQ:GWPH) lead drug, Epidiolex, a cannabidiol-based oral medication designed to treat two rare types of childhood-onset epilepsy known as Dravet syndrome and Lennox-Gastaut syndrome. After easily meeting its primary endpoint of a statistically significant reduction in seizure frequency relative to baseline and the placebo in multiple late-stage studies, GW Pharmaceuticals had a relatively easy path to make history by bringing the first cannabis-derived drug to pharmacy shelves.
Since cannabinoids have, in some instances, demonstrated medical benefits in select ailments, the belief is that other cannabinoid-based drug developers, like OCT, may have similar luck.