It is Halloween today, but this is not a scary story. In Canada, since October 17 cannabis is legal both recreationally and more medical purposes. In practice anyone can walk into a store or buy on line and smoke. If you begin to really examine the industry, you will start to see comparisons between the tobacco and beverage industries. In theory, one can grow or make them yourselves, but it is much easier to buy and which brand do you buy? It is up to the large players to make brands that if someone does walk into a store they will ask for that brand. Who does brand better in the tobacco business than Altria which among other brands owns Marlboro and in their beer industry owns a piece of Anheuser-Busch or Budweiser.

There was an article written by Christina Pellegrini and Marina Strauss of the Globe since denied by both sides, senior people from Altria were visiting Aphria to consider making an equity investment and perhaps gaining control over the company. To do this venture, the folks at Altria must see the US as eventually allowing recreational cannabis.

One of the facts noted Altria stake in Belgium’s AB InBev which they acquired when they sold them Miller Brewery is about 10% and produces $800 million a year in dividends.

Linking to dividend paying stocks, Altria earns a cash flow and although they sell cigarettes it is a very good cash flow. Whether you buy shares in the company is an ethical question for you, however the formula for selling high and attaining consistent cash flows is hard to overlook. If you do not like the company for ethics look for other industries which operate in a similar fashion.

There are more questions than answers, till the next time – to raising questions.