Cannabis, caffeine and chocolate -- BAT's expanding footprint in Canada

BAT presentation 2021 showing
three areas of focus

Four years have now passed since British American Tobacco revamped its branding and proclaimed a "better tomorrow" business plan focused on new nicotine delivery systems, and three years since it announced that it was going "beyond nicotine" to sell other psychoactive substances ("On the go wellbeing and stimulation").

The release earlier this month of BAT's most recent annual report provides an update these activities. This post reports on those which  have particular relevance to Canada.

BAT adds cannabis to its business plan

BAT has added a fourth product category of activity. To the three areas identified in 2021 (Tobacco, New Nicotine and Beyond nicotine wellbeing and stimulation) it has now added a fourth drug - cannabis - to its strategy for "Quality Growth". 

The company notes that revenues from the global legal market for cannabis have doubled from £5.2 billion in 2019 to £11.1 billion in 2022. In this year's annual report the company boasts that cannabis is "an exciting potential category for the future".

BAT Combined Annual and Sustainability Report for 2023

Coming soon: "disruptive inhalation formats" for cannabis 

Canada is a proving ground for BAT's entry into cannabis. The tobacco giant now owns 45% of Organigram. Based in New Brunswick, Organigram is one of the larger cannabis manufacturers in Canada and sell a range of combustible, edible and vaporized products.

Organigram reports that its partnership with BAT is aimed at "innovative technologies in the edible, vape and beverage categories in addition to new disruptive inhalation formats"  BAT reports that its collaboration with Organigram "is in late-stage development of a suite of emulsions, novel vapour formulations, flavour innovations and packaging solutions which are soon to be commercialised by Organigram in the Canadian market."

Organigram Investor Presentation 2024

Water soluble cannabis for beverages and cosmetics

Organigram is not the only cannabis-related investment of BAT in Canada. Through its venture capital arm, BtomorrowVentures, BAT is funding the development of water-soluble cannabis by the Vancouver-based company Trait.  This technology is promoted as a way to infuse cosmetics and to increase the dosage of cannabinoids in beverages. In October 2023 Traitbio posted:

“The collaboration between Btomorrow Ventures and Gotham Green Partners, in particular, has been a powerful catalyst in advancing Trait’s development and commercialization activities,” says Hanny Kanafani, PhD, President and COO at Trait, “thereby enabling the launch of unique first-generation cannabinoids which, when added to waters/beverages, maintain beverage clarity and do not impart turbidity, even when added at competitive dosages.

“When added into cosmetic applications, Trait’s water-soluble materials do not require additives typically used in skincare products to maintain quality; and opens the door for unique and differentiated infused cosmetic applications.”

British American Tobacco and the candy counter

Awake chocolate manufactures caffeinated chocolate under the eponymous brand name ("each bite .... contains as much caffeine as a half a cup of joe!". It also makes chocolate designed to help people relax ("mello milk and dark chocolate bites are the perfect way to wind down. Infused with a natural botanical blend of lemon balm and L-Theanine, our delicious chocolate promotes relaxation without drowsiness.")

The company is privately owned and is based in Mississauga. British American Tobacco first invested in Awake in 2021 and increased its financing again in 2023. 

Although Mello 'relaxing chocolate' is not currently available, the caffeinated product Awake can be found in convenience and other stores across Canada.