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  • Lexaria teams up with Altria in reduced-risk nicotine

    • Lexaria Bioscience (OTCQX:LXRP) subsidiary Lexaria Nicotine LLC inks agreements with Altria Group (MO -1%) subsidiary Altria Ventures aimed at developing new reduced-risk nicotine consumer products leveraging Lexaria's DehydraTECH platform.
    • Altria will fund R&D in exchange for a minority stake in Lexaria Nicotine and certain rights to DehydraTECH. Initial funding will be $1M with an option to invest up to an additional $12M in the venture.
    • Lexaria says DehydraTECH enhances the performance of beneficial compounds in ingestible products across four categories: taste & smell, speed of action, bio-absorption and bioavailability.
  • NY wants to raise tobacco, e-cig age to 21

    • New York Governor Andrew Cuomo has proposed raising the state's minimum sales age for tobacco and electronic cigarette products to 21 from 18, according to an official statement.
    • The legislation would also ban the sale of tobacco and e-cigarette products in pharmacies, restrict their display in retail stores that are not adult-only, and require that e-cigs be sold only by licensed retailers.
    • Related: PM, MO, BTI, TPB, OTCPK:GLLA, OTC:AHII, VGR, OTCQX:IMBBY, OTCPK:JAPAY
  • Cowen cools on Altria

    • Cowen downgrades Altria (NYSE:MO) to a Market Perform rating from Outperform as points to accelerating declines in the U.S. cigarette market.
    • "Although the Juul investment was likely the right move, Altria is incentivized to accelerate cigarette industry volume declines," warns analyst Vivien Azer.
    • The firm drops its five-year sales growth forecast for Altria to 1.9% and lowers its price target on shares to $53 from $74.
    • Shares of Altria are down 0.72% in premarket trading to $49.94.
  • China National Tobacco plans IPO for international unit

    • China National Tobacco, a state monopoly that accounts for 40% of global cigarette production, is planning to list its international unit in Hong Kong.
    • China Tobacco International is primarily responsible for procuring overseas tobacco leaf for the cigarette giant, which has a bigger market share than the next five global tobacco companies combined.
    • Other IPOs to look forward to in 2019 include Uber and Lyft.
    • Related: PM, BTI, MO, OTCQX:IMBBY, OTCPK:JAPAY
  • FDA head wants e-cig CEO meetings

    • FDA Commissioner Scott Gottlieb tweets that he will reach out to e-cigarette manufacturers for meetings regarding "epidemic" teen use of the products.
    • Gottlieb, in another tweet: "There's no reason manufacturers must wait for FDA to forcefully address the epidemic. Yet some already appear to back away from commitments made to the FDA and the public."
    • In November, the FDA announced new regulations on flavored tobacco products, which included restricting sales of fruity or sweet tobacco at retail stores.
    • Related tickers: (BTI -1.6%),(PM -2.6%), (MO -2.3%), (TPB -3.7%), (VGR -2.7%), (OTCQB:GLLA -5.2%).
  • Altria cut to Sell at Citi, as price paid for Juul stake is 'destroying value'

    • Altria (MO -2%) tumbles after Citi downgrades shares to Sell from Neutral with a $45 price target, cut from $67, as analyst Adam Spielman says MO's $12.8B investment for a 35% stake in Juul "is destroying value."
    • MO is effectively signaling doubts about the future of its core cigarette business, Spielman says, and the deal weakens MO's existing business as it allows Juul to directly contact the company's current consumers to try to persuade them to switch from Marlboro to Juul.
    • Morgan Stanley's Pamela Kaufman also thinks MO's move comes at a high price, noting the $38B valuation represents more than double the $16B valuation that Juul received in an investment round last summer.
    • Kaufman, who maintains his Equal Weight rating and $54 price target on MO, also sees risk in MO's lack of operating control and the potential for further FDA regulation.
    • Stifel analyst Christopher Growe calls the $38B valuation "unusually high" and believes the price paid offsets most of the future potential benefit from the addition of JUUL, while Deutsche Bank's Steve Powers says the deal is "not the holiday gift we'd hoped for."
  • Altria investment means big payday for Juul employees

    • CNBC reports Juul's (JUUL) 1.5K employees will earn a $2B dividend as part of Altria's (MO -4%) $12.8B investment.
    • Doing that math, that averages out to $1.3M for each worker, though the amount each receives is sure to quite a bit different from that figure.
    • Stifel bull Chris Growe doesn't sound too impressed with the overall deal, noting the steep price MO is paying means a decent return could be difficult.
    • Previously: Altria seals deal for stake in Juul Labs (Dec. 20)
  • Altria cutting expenses to offset Juul and Cronos acquisition costs

    • Alongside the confirmation of its $12.8B investment in Juul Labs, Altria (NYSE:MO) announces a cost-reduction program with the goal of trimming $500M-$600M in annualized expenses by the end of next year.
    • That amount should offset most of the interest expense associated with the Juul and Cronos Group investments. Altria expects $0.09-$0.11 per share of pretax restructuring costs, most of which will be booked in Q4.
    • Full-year guidance for adjusted EPS of $3.95-$4.03 remains in place, but 2019 EPS growth is seen at slightly below the low end of the company's 7-9% target. This is mostly thanks to the debt incurred from the Juul and Cronos buys.
    • Previously: Altria seals deal for stake in Juul Labs (Dec. 20)
  • Altria seals deal for stake in Juul Labs

    • As leaked yesterday, Altria (NYSE:MO) has invested $12.8B in e-vapor leader Juul Labs (JUUL), representing a 35% ownership stake, and valuing Juul at $38B.
    • Management will host a conference call this morning at 9:00 am ET to discuss the investment.
  • Altria near deal for big stake in Juul - Dow Jones

    • Altria (MO +0.9%) is near a deal for a 35% stake in Juul (JUUL) that would value the e-cig maker at about $38B, according to the report.
    • An official announcement could come this week.
  • Altria declares $0.80 dividend

  • Invesco S&P 500 Quality ETF (SPHQ) November Summary

    • November monthly performance was: -4.16%
    • AUM of $1.3B
    • 52-week performance vs. the S&P 500 is: -3%
    • No dividends were paid in November
    • Top 10 Holdings as of 11/29/2018: Procter & Gamble Co (PG): 5.14641%, Visa Inc Class A (V): 4.81162%, Mastercard Inc A (MA): 4.37679%, Apple Inc (AAPL): 4.36353%, Walt Disney Co (DIS): 3.91668%, Starbucks Corp (SBUX): 3.46263%, NVIDIA Corp (NVDA): 2.99614%, Altria Group Inc (MO): 2.97964%, Union Pacific Corp (UNP): 2.83436%, Adobe Inc (ADBE): 2.74872%
  • Altria-Philip Morris partnership with Juul stake?

    • Piper Jaffray says Altria (MO +1%) has enough financial firepower after its investment in Cronos to partner with Philip Morris International (PM +0.8%) on a stake in Juul and still hold on to its investment-grade debt rating.
    • Analyst Michael Lavery says he is unaware of any restrictions that would stand in a way of a Altria-Philip Morris joint stake in Juul (per Bloomberg).
  • Altria Group backs away from vaping products

    • Altria Group (NYSE:MO) announces that it will discontinue the development and distribution of all MarkTen and Green Smoke e-vapor products and VERVE oral nicotine-containing products, citing their expected financial performance and the current regulatory environment.
    • It says it will refocus its resources on more compelling reduced-risk tobacco opportunities.
    • Related tickers: PM, BTI, OTCQX:IMBBF, OTCPK:JAPAY, VGR, TPB
  • Altria taking $1.8B stake in Cronos Group

    • Nasdaq has suspended trading in Cronos Group (NASDAQ:CRON) pending the release of news.
    • Update: Altria Group (NYSE:MO) has agreed to take a 45% stake in CRON via the purchase of stock at C$16.25 per share totaling ~C$2.4B (US$1.8B). MO will have the right to nominate four directors, including one independent, and will receive a warrant to acquire an additional 10% stake at C$19.00 per share.
    • Shares will resume trading at 7:45 am ET.
    • Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY) are up 2% and 4%, respectively, premarket.
    • Update: CRON is up 22% premarket.