A worker cuts off marijuana
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LONDON – British American Tobacco is looking to sell cannabis products as it seeks new sources of revenue outside of cigarettes and vaping.
Kingsley Wheaton, the company’s head of marketing, told CNBC’s “Squawk Box Europe” on Wednesday that SSK, or cannabidiol, is one of the consumer spaces he is paying attention to.
CBD is an active ingredient in cannabis derived from the hemp plant, a cousin of the marijuana plant. The health benefits are widely predicted by manufacturers, but scientists say more research is needed.
“We are indeed going to think about and just go beyond the tobacco and nicotine space,” said Wheaton, adding that downtown is an ‘exciting growth area for our business for the future’.
Wheaton’s comments come shortly after two cannabis companies were listed on the London Stock Exchange, but BAT remains cautious.
“It’s a very different regulatory landscape if you go around the world and many markets currently remain inaccessible for regulatory reasons,” Wheaton said.
“We make a very big distinction between downtown and other forms of cannabis,” he said. “We’re interested in CBD. But I think the biggest point is that we want to build the portfolio of the future for our business. We’re trying to build the brands of the future. We’re trying to meet the needs of the consumer. That smoking previously had a new, transformed portfolio. ‘
In January, BAT launched a CBD vaping product called Vuse that is in mint, mango and berry flavors, and it has two strengths – 50 mg and 100 mg.
The Vuse product is sold by a pilot in Manchester. “It’s there now,” Wheaton said. “We test and learn and understand it.”
British American Tobacco shares fell 5.7% on Wednesday morning, despite the world’s second largest tobacco company beating the profit estimate ahead of time.
He added that the BAT pandemic has enabled the way in which it does business to shake up more radically and change from a ‘tobacco business to a business that is more about technology.’