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Canadian pot producer Cronos Group (NASDAQ: CRON) has officially entered into a "subscription agreement" with American tobacco giant Altria Group (NYSE: MO), according to a press release issued by the company prior to the opening bell this morning.

That will give Altria a 45% stake in the company, with an option for Altria to increase its stake to 55% over the next five years.

Separately Altria also said it would discontinue some of its e-cigarette brands, including all of MarkTen and Green Smoke e-vaper products, based on their financial performance and will take a related pretax charge of US$200 million in the fourth quarter.

FOX Business breaks down other companies that have eyed investments in the cannabis industry below.

The exclusive partnership will give Cronos additional financial resources, regulatory expertise and product development and commercialization capabilities to tap global cannabis opportunities, the company said in the announcement.

Altria is also in talks to take a minority stake of between 20 percent and 40 percent in Juul, sources told Reuters last month.

The Marlboro maker's $2.4 billion bet on Cronos is by far the largest move by Big Tobacco into cannabis, and bodes well for the overall sector, said Martin Landry, an analyst with GMP Securities.

"In Canada the focus seems to still be on capacity, but that is not what this is about", the Cronos CEO added. Altria shares that vision, Mr. Gorenstein said.

The deal is expected to close in the first half of 2019.

"That experience, we think, is going to be very important as we try to accelerate new product categories".

"It looks like an understanding that they would become one and the same", Shea said, noting that Altria will also have four of seven board seats. JPMorgan Chase Bank NA, a subsidiary of JPMorgan Chase & Co., is providing financing to Altria. Canada's top lenders, who have largely refused to serve clients in the cannabis sector for years, are now getting shut out of the sector's biggest transactions.

Short-seller Andrew Left of Citron Research, who has been a critic of Cronos and was betting against the stock going into Friday, said that this deal shows why Canadian growers trade at a premium to USA -based cannabis companies.

Marijuana, while still illegal on the federal level in the U.S., is allowed in an increasing number of states.

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