Market Overview

Altria to Make Growth Investment in Cronos Group


Altria to Invest USD $1.8 Billion (CAD $2.4 Billion) for 45%
Ownership Interest in Leading Global Cannabinoid Company with Warrant to
Increase Ownership to 55% Over Next 4 Years

Altria Group, Inc. (Altria) (NYSE:MO) today announced that it has
entered into an agreement to acquire newly issued shares in Cronos Group
Inc. (Cronos Group) (TSX:CRON, NASDAQ:CRON), a leading global
cannabinoid company, headquartered in Toronto, Canada. The transaction
represents a 45% equity stake in Cronos Group, at a price of CAD $16.25
per share, for an aggregate investment by Altria of approximately USD
$1.8 billion (approximately CAD $2.4 billion).1

As part of the agreement, at closing, Altria will have the right to
nominate four directors, including one independent director, to serve on
Cronos Group's Board of Directors, which will be expanded from five to
seven directors. The agreement includes a warrant to acquire an
additional ownership interest in Cronos Group at a price of CAD $19.00
per share exercisable over four years from the closing date. If
exercised in full, the warrant would increase Altria's ownership in
Cronos Group by 10% to approximately 55%.

"Investing in Cronos Group as our exclusive partner in the emerging
global cannabis category represents an exciting new growth opportunity
for Altria," said Howard Willard, Altria's Chairman and Chief Executive
Officer. "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."

"Altria is the ideal partner for Cronos Group, providing the resources
and expertise we need to meaningfully accelerate our strategic growth,"
said Mike Gorenstein, Cronos Group's Chairman, President and Chief
Executive Officer. "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."

This investment positions Altria to participate in the emerging global
cannabis sector, which it believes is poised for rapid growth over the
next decade. It also creates a new growth opportunity in an adjacent
category that is complementary to Altria's core tobacco businesses.

Altria expects its investment to help Cronos Group accelerate its growth
strategies and its R&D and intellectual property development.
Additionally, Altria will provide expertise to help Cronos Group thrive
in the growing global cannabis market. These services may include
regulatory affairs, regulatory science, compliance, government affairs
and brand management.

About Cronos Group

Cronos Group is a globally diversified and vertically integrated
cannabis company with a presence across five continents. Cronos Group
operates two wholly-owned Canadian licensed producers: Peace Naturals
Project Inc., which received the first non-incumbent medical cannabis
license granted by Health Canada, and Original BC Ltd., which is based
in the Okanagan Valley, British Columbia. Cronos Group operates a
portfolio of brands which includes Peace Naturals, a global
medicinal brand and two Canadian adult-use recreational brands, COVE
and Spinach. Cronos Group has multiple
international production and distribution platforms across five

Cronos Group is establishing infrastructure to create an efficient
global production footprint and a diversified global sales and
distribution network. Cronos Group is focused on creating and monetizing
disruptive intellectual property and growing a portfolio of iconic
brands that resonate with consumers. Cronos Group is committed to
building an industry-leading business that transforms the perception of
cannabis and responsibly elevates the consumer experience.

Cronos Group has no U.S. operations, and cannabis remains illegal at the
federal level. Through Cronos Group, Altria is better positioned should
cannabis become federally permitted.

Transaction Structure

Under the terms of the agreement, at closing Altria will pay CAD $16.25
per share of Cronos Group stock issued in the transaction, or a 41.5%
premium to the 10-day volume weighted average price of CAD $11.48 on the
TSX as of November 30, the last unaffected trading day prior to when
Cronos Group announced it was in preliminary discussions with Altria
regarding a possible investment in Cronos Group. The transaction will
result in an aggregate investment by Altria at closing equal to
approximately USD $1.8 billion in cash (approximately CAD $2.4 billion).1
Altria will receive shares representing a 45% interest in Cronos Group.

The agreement also includes a warrant to acquire additional ownership
interest in Cronos Group at a price of CAD $19.00 per share exercisable
over the next four years. If exercised in full, the warrant would
increase Altria's ownership in Cronos Group by 10% to 55%. The aggregate
exercise price for the warrant is equal to approximately USD $1.0
billion (approximately CAD $1.4 billion),1 subject to
customary adjustments.

The transaction is subject to customary closing conditions, including
Cronos Group shareholder approval and receipt of regulatory approvals,
which will be pursued promptly. The transaction is expected to close in
the first half of 2019. At closing, Cronos Group will remain a Canadian
publicly-traded company headquartered in Toronto, Canada and continue to
be led by its existing management team.

A copy of the agreement containing the terms of the transaction will be
filed with the Securities and Exchange Commission (SEC) and Canadian
regulatory authorities.

Financing & Advisors

Altria has received committed financing totaling approximately CAD $2.4
billion from JPMorgan Chase Bank, N.A. Altria may consider seeking
permanent financing in the future.

Perella Weinberg Partners LP is the financial advisor to Altria.
Wachtell, Lipton, Rosen & Katz and Goodmans LLP are providing legal
counsel to Altria for the deal. Hunton Andrews Kurth LLP is providing
legal counsel to Altria regarding the financing.

Lazard Ltd. is the financial advisor to Cronos Group. Sullivan &
Cromwell LLP and Blake, Cassels & Graydon, LLP are providing legal
counsel to Cronos Group for the deal.

Altria's Profile

Altria's wholly-owned subsidiaries include Philip Morris USA Inc. (PM
USA), U.S. Smokeless Tobacco Company LLC (USSTC), John Middleton Co.
(Middleton), Sherman Group Holdings, LLC and its subsidiaries (Nat
Sherman), Nu Mark LLC (Nu Mark), Ste. Michelle Wine Estates Ltd. (Ste.
Michelle) and Philip Morris Capital Corporation (PMCC). Altria holds an
equity investment in Anheuser-Busch InBev SA/NV (AB InBev).

The brand portfolios of Altria's tobacco operating companies include Marlboro®,
Black & Mild®, Copenhagen®,
Skoal®, VERVE®, MarkTen®
and Green Smoke®. Ste. Michelle produces
and markets premium wines sold under various labels, including Chateau
Ste. Michelle
®, Columbia Crest®,
14 Hands® and Stag's Leap Wine Cellars,
and it imports and markets Antinori®, Champagne
Nicolas Feuillatte
, Torres®
and Villa Maria Estate products in
the United States. Trademarks and service marks related to Altria
referenced in this release are the property of Altria or its
subsidiaries or are used with permission.

More information about Altria is available at and on the
Altria Investor app or follow us on Twitter, Facebook and LinkedIn.

Forward-Looking and Cautionary Statements

This release contains projections of future results and other
forward-looking statements that involve a number of risks and
uncertainties and are made pursuant to the Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995.

Important factors that may cause actual results and outcomes to differ
materially from those contained in such forward-looking statements
include, without limitation, the parties' ability to consummate the
transaction as expected; the possibility that one or more of the
conditions to the consummation of the transaction may not be satisfied;
the possibility that regulatory or shareholder approvals required for
the transaction may not be obtained in a timely manner, if at all; the
parties' ability to meet expectations regarding the timing, completion,
and other matters relating to the transaction; and any event that could
give rise to the termination of the agreement between Altria and Cronos
Group. Other important factors include the possibility that the expected
benefits of the transaction may not materialize in the expected manner
or timeframe, if at all; the potential inaccuracy of the financial
projections; prevailing economic, market, or business conditions
negatively affecting the parties; risks relating to the financing of the
transaction, including the risk that Altria is not able to secure
permanent financing for the transaction on favorable terms, if at all,
and the risk of a downgrade in Altria's credit ratings; risks that the
transaction disrupts Cronos Group's current plans and operations; the
fact that Altria's reported earnings and financial position and any
dividends paid by Cronos Group on shares owned by Altria may be
adversely affected by unfavorable foreign currency exchange rates, tax
and other factors, including the risks encountered by Cronos Group in
its business; risks related to the disruption of the transaction to
Altria, Cronos Group and their respective management; risks relating to
the effect of announcement of the transaction on Cronos Group's ability
to retain and hire key personnel and maintain relationships with
customers, suppliers and other third parties; and the other factors
detailed in the parties' publicly filed documents, including Altria's
respective Annual Report on Form 10-K for the year ended December 31,
2017 and its Quarterly Report on Form 10-Q for the period ended
September 30, 2018, and Cronos Group's filings with the Canadian
Securities Administration and the United States Securities Exchange
Commission, including its annual information form dated April 27, 2018.

1 Based on reference exchange rate of 0.747 USD / CAD at
market close on December 6 as quoted by Bloomberg

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