British American Tobacco looks to expand into cannabis. Is BATS a good investment?Posted by On

Dried up marijuana leaves

In the wake of two new cannabis stocks listing on the London Stock Exchange this week (Kanabo and MGC Pharmaceuticals), 119-year-old British American Tobacco (LSE:BATS) is considering its options in the space.

British American Tobacco’s foray into CBD

The FTSE 100 stalwart has been struggling in recent years as tobacco falls out of favour. Nowadays, it still sells big brand cigarettes such as Lucky Strike and Rothmans, but it’s also been repositioning into smoking alternatives such as vaping. Given its growing popularity, cannabis seems like the next logical step.

Speaking to CNBC, BATS Chief Marketing Officer Kingsley Wheaton said: “last year we signalled that we would look at consumer spaces beyond nicotine and indeed CBD would be one of those…it’s an exciting growth area for our business for the future”.

CBD or cannabidiol, is a cannabis ingredient derived from hemp. While consumer demand is rocketing, the regulatory landscape remains pretty strict. And this becomes particularly complex between countries and regions.

British American Tobacco has begun a CBD pilot program in Manchester. Its VUSE CBD Zone is a CBD vaping product. It currently comes in three flavours and two strengths.

Is British American Tobacco profitable?

BATS has a price-to-earnings ratio of 9, earnings per share are £2.10, and it’s one of the best dividend payers on the FTSE 100 at 8%. However, the dividend cover is only at 1 times, so it wouldn’t take much for a cut to be…

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In the wake of two new cannabis stocks listing on the London Stock Exchange this week (Kanabo and MGC Pharmaceuticals), 119-year-old British American Tobacco (LSE:BATS) is considering its options in the space.

British American Tobacco’s foray into CBD

The FTSE 100 stalwart has been struggling in recent years as tobacco falls out of favour. Nowadays, it still sells big brand cigarettes such as Lucky Strike and Rothmans, but it’s also been repositioning into smoking alternatives such as vaping. Given its growing popularity, cannabis seems like the next logical step.

Speaking to CNBC, BATS Chief Marketing Officer Kingsley Wheaton said: “last year we signalled that we would look at consumer spaces beyond nicotine and indeed CBD would be one of those…it’s an exciting growth area for our business for the future”.

CBD or cannabidiol, is a cannabis ingredient derived from hemp. While consumer demand is rocketing, the regulatory landscape remains pretty strict. And this becomes particularly complex between countries and regions.

British American Tobacco has begun a CBD pilot program in Manchester. Its VUSE CBD Zone is a CBD vaping product. It currently comes in three flavours and two strengths.

Is British American Tobacco profitable?

BATS has a price-to-earnings ratio of 9, earnings per share are £2.10, and it’s one of the best dividend payers on the FTSE 100 at 8%. However, the dividend cover is only at 1 times, so it wouldn’t take much for a cut to be…



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