Altria Group, Inc (NYSE:MO) today announced that its wholly owned subsidiary, Altria Summit LLC, has notified Cronos Group Inc. (Cronos) of its irrevocable abandonment of (i) its warrant to purchase additional common shares of Cronos (the Warrant) and (ii) 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 CAD$19.00 per common share. Prior to abandonment of the Warrant, Altria, through its subsidiaries, owned 156,573,537 common shares of Cronos (representing approximately 41% of the Cronos common shares issued and outstanding) and, by fully exercising the Warrant, could increase its ownership by 84,243,223 Cronos common shares to 240,816,760 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 CAD$3.81 and the Cronos common shares have not traded above CAD$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 156,573,537 common shares of Cronos.

Altria, through its subsidiaries, holds the Cronos common shares for investment purposes. Altria will continue to evaluate Cronos’s business and prospects and all other factors it deems relevant in determining whether it or its affiliates will acquire additional common shares of Cronos or dispose of common shares of Cronos in the open market, in privately negotiated transactions (which may be with Cronos or with third parties) or otherwise.

For additional information, see the early warning report filed on SEDAR or a copy may be obtained by contacting:

Altria Client Services
Investor Relations
804-484-8222

Altria Client Services
Media Relations
804-484-8897

Altria’s Profile

We have a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. Our Vision by 2030 is to responsibly lead the transition of adult smokers to a smoke-free future (Vision). We are Moving Beyond Smoking™, leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices - believing it is a substantial opportunity for adult tobacco consumers, our businesses and society.

Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own Philip Morris USA Inc. (PM USA), the most profitable U.S. cigarette manufacturer, and John Middleton Co. (Middleton), a leading U.S. cigar manufacturer. Our smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Company LLC (USSTC), the leading global moist smokeless tobacco (MST) manufacturer, and Helix Innovations LLC (Helix), a leading manufacturer of oral nicotine pouches.

Additionally, we have a majority-owned joint venture, Horizon Innovations LLC (Horizon), for the U.S. marketing and commercialization of heated tobacco stick products and, through a separate agreement, we have the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System® and Marlboro HeatSticks® through April 2024.

Our equity investments include Anheuser-Busch InBev SA/NV (ABI), the world’s largest brewer, Cronos Group Inc. (Cronos), a leading Canadian cannabinoid company, and JUUL Labs, Inc. (JUUL), a U.S. based e-vapor company.

The brand portfolios of our tobacco operating companies include Marlboro®, Black & Mild®, Copenhagen®, Skoal® and on!®. Trademarks and service marks related to Altria referenced in this release are the property of Altria or our subsidiaries or are used with permission.

Learn more about Altria at www.altria.com and follow us on Twitter, Facebook and LinkedIn.

Forward-Looking and Cautionary Statements

This release contains certain forward-looking statements with respect to Altria’s investment in Cronos common shares, which are subject to various risks and uncertainties. Such forward looking statements relate to, among other things, Altria’s continued evaluation of Cronos’s business and prospects and potential future transactions involving Cronos’s common shares. Factors that may cause actual results to differ include risks relating to Altria’s ability to realize the expected benefits of its equity investment in Cronos in the expected manner or timeframe, if at all, and prevailing economic, market, regulatory or business conditions, or changes in such conditions, negatively affecting Altria or Cronos. Other risk factors are detailed from time to time in Altria’s quarterly reports on Form 10-Q and most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this press release. Altria assumes no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this release.

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