The American multinational tobacco company, Philip Morris, is set to acquire the Israeli-based cannabis inhaler company Syqe Medical for up to $650 million, making it one of the largest companies in the global cannabis space.
As first reported by the Israeli news media outlet Calcalist, Philip Morris plans to invest $120 million initially to aid Syqe Medical in obtaining approval from the U.S. Food and Drug Administration (FDA) for its inhaler.
If the inhaler passes clinical trials and receives FDA approval, Philip Morris will acquire all the shares of Syqe Medical for $650 million.
This acquisition will be carried out through Philip Morris’ subsidiary, Vectura, which focuses on inhaler technology and was purchased for $1.44 billion in 2021 as part of the company’s strategy to shift towards smoke-free alternatives.
The deal with Syqe would make a significant step forward for the tobacco multinational to penetrate the cannabis industry.
As reported by several news media outlets, if the company achieves the $650 million valuation, Syqe will enter the league of the top ten largest cannabis companies worldwide, alongside industry giants like Tilray and Aurora.
Philip Morris already invested $20 million in Syqe in 2016, acknowledging the promise of their innovative approach.
Syqe’s primary product is a metered-dose inhaler designed for pain reduction treatment using medical cannabis. The key innovation lies in Syqe’s inhaler, which utilizes the raw inflorescence of the cannabis plant instead of its processed products. Additionally, the inhaler enables precise measurement of the dosage intended for each patient.
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Founded by Perry Davidson in 2011, Syqe has received investments totaling $83 million, representing over eight years of development.
During this period, the company obtained a permit to import medical cannabis for research purposes from the Dutch company Bedrocan Cannabis Corp.
Syqe’s cannabis inhaler was officially launched in 2019 and marketed and distributed by the Israeli pharmaceutical company Teva, and it is currently available in Israel and Australia, priced at approximately $550.
According to official data, there are 125,099 patients in Israel as of the beginning of July. However, according to the Israeli magazine cannabis.com, only a small number, fewer than 100 patients, purchase Syqe’s inhaler products regularly.
In 2021, Canada granted approval to Syqe’s medical cannabis device, but it appears that the product has not yet been introduced to the market.
In February, Syqe Medical made an agreement with the Israeli Ministry of Defence to provide the SyqeAir Inhaler and Cartridges to veterans who are prescribed medical cannabis for inhalation.
Philip Morris’s potential acquisition could be one of the most significant in recent years, indicating the increasing importance of medical technology in Israel’s healthcare sector.
As well as Philip Morris, other tobacco multinational companies have been exploring investments in the cannabis industry in the last few years.
Among them, the British multinational tobacco company Imperial Brands invested in Oxford Cannabinoid Technologies (OCT).
Altria Group acquired a 45% stake in Cronos Group for about $1.8 billion; however, it has been recently reported that Cronos Group is exploring potential sale options.
Imperial Brands invested $123 million in Auxly Cannabis Group, and BAT launched its first CBD vaping product and made a $25 million investment in Trait Biosciences, a Canadian company focusing on CBD-based beverages.
However, the interest of the tobacco industry’s key players in the cannabis space is evident not only in business operations but also in lobbying efforts to advocate for cannabis legalization in the United States.