Altria Abandons Expiring Cronos Warrant, Maintains Initial Investment

Altria Abandons Expiring Cronos Warrant, Maintains Initial Investment

Altria Group, Inc MO announced that its wholly owned subsidiary, Altria Summit LLC, has notified Cronos Group Inc. CRON of its irrevocable abandonment of its warrant to purchase additional common shares of Cronos and all rights that it may have held in the warrant or any common shares underlying the warrant for no consideration.

In March 2019, Altria acquired, through its subsidiaries, a 45% ownership interest in Cronos and the warrant. The warrant was exercisable until March 8, 2023 at an exercise price of CA$19.00 per common share. Prior to abandonment of the warrant, Altria, through its subsidiaries, owned 156.6 million common shares of Cronos and, by fully exercising the warrant, could increase its ownership by 84.2 million Cronos common shares to 240.8 million Cronos common shares (representing approximately 52% of the Cronos common shares that would be issued and outstanding following full exercise of the warrant).

The closing share price of Cronos common shares on December 15, 2022 was CA$3.81 and the Cronos common shares have not traded above CA$6.00 over the past 12 months. Given the Cronos trading levels and the March 2023 expiry of the warrant, Altria elected to abandon the warrant on December 16, 2022. As a result of the warrant abandonment, Altria expects to claim a capital loss of $483 million on its U.S federal consolidated income tax return for 2022. Altria continues to own 156.6 million common shares of Cronos.

Get your daily dose of cannabis news on Benzinga Cannabis. Don’t miss out on any important developments in the industry.

Photo by Richard T on Unsplash

Related News

Profitability For Canopy And Cronos Is Elusive, Plus Cannabis Headwinds In 2023 Cronos Launches Spinach FEELZ Day Trip Gummies With THC And CBC


Posted In: CannabisNewsPenny StocksSmall CapMarketsAltria Summit LLCpremium


Meet the biggest cannabis industry players and make deals that will push the industry forward.

Featuring live company presentations, insider panels, and unmatched access to networking, the Benzinga Cannabis Capital Conference is where cannabis executives and entrepreneurs meet.

Join us April 11-12, 2023 at Fontainebleau Miami Beach in sunny Florida.