To no one’s surprise, Marlboro cigarette maker Altria Group Inc. (NYSE: MO) announced Friday that it has agreed to acquire a 45% stake in Canada-based Cronos Group Inc. (NASDAQ: CRON) for $1.8 billion in cash. The agreement represents a 41.5% premium to the price of Cronos stock on November 30, the last day before Altria announced it was discussing the investment.

In addition to two wholly owned Canadian producers of cannabis, Cronos also owns a medicinal marijuana brand and two recreational-use brands, as well as international production and distribution platforms. The company has no U.S. operations because marijuana remains illegal under U.S. law, but, according to the announcement, “Altria is better positioned should cannabis become federally permitted” in the United States. Earlier this week, we reported details on Cronos’s assets.

Howard Willard, board chair and chief executive of Altria, commented:

Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria. We believe that Cronos Group’s excellent management team has built capabilities necessary to compete globally, and we look forward to helping Cronos Group realize its significant growth potential.

In addition to its 45% stake in Cronos, Altria receives the right to name four directors to the Cronos board of directors, which has been expanded from five to seven members. One of Altria directors will be independent.

Altria also receives a warrant to acquire additional shares in Cronos at a price of C$19 a share, exercisable over four years from the closing date of the current transaction. If Altria acquires all the available shares in its warrant, the company will own a majority interest of about 55% in Cronos.

Cronos is one of the many cannabis-related companies that is being valued today for its future potential rather than for its revenues. The company had a market cap of around $1.9 billion market cap for its U.S. listing, including a 16% gain last Monday following reports of its discussions with Altria.

Mike Gorenstein, board chair and chief executive of Cronos, noted:

The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers. Importantly, Altria shares our vision of driving long-term value through innovation, and we look forward to continuing to differentiate Cronos Group in this area.

Altria is not the first tobacco company to step into the growing cannabis sector. Last February, Alliance One International Inc. (NYSE: AOI) acquired majority stakes in two Canadian medicinal marijuana growers. Alliance One’s traditional business has been as an independent leaf-tobacco merchant serving large international cigarette makers.

Beverage maker Constellation Brands Inc. (NYSE: STZ) acquired a 38% stake in Canadian grower Canopy Growth Corp. (NYSE: CGC) in August for $4 billion and has the option of acquiring a majority stake within three years.

In a separate announcement Friday morning, Altria said it is discontinuing its MarkTen and Green Smoke vapor products and its Verve oral nicotine products due to poor expected sales and regulatory restrictions. The company expects to take a one-time $200 million non-cash impairment charge related to this decision.

Altria’s stock traded up about 2.3% in Friday’s premarket, at $55.65 in a 52-week range of $52.90 to $74.38.

Cronos shares traded up more than 35% at $14.14 in Friday’s premarket. The stock’s 52-week range is $5.12 to $15.30.

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