British tobacco and cigarette giant Imperial Brands (IMBBY) has appointed Simon Langelier, the chairman of Canadian medicinal cannabis group PharmaCielo Ltd, to its board of directors. Langelier held a variety of roles in his 30-year career with rival Philip Morris International Inc. (PM).
The announcement comes as Imperial, one of the least diversified of the major tobacco companies, is shifting its strategy after posting a 6% decline in global tobacco volumes in the six months through the end of March.
As Big Tobacco struggles to boost revenues due to declining global smoking rates and increased government regulation, including higher taxes and stricter packaging laws, major players have doubled down on innovation outside of traditional businesses. Global cigarette leaders have deployed billions of dollars in research and development (R&D) to build out vaping products, heat-not-burn sticks, e-cigarettes, low-calorie energy boosters and other alternative smoking products that they would like to market as “reduced harm.” Tobacco companies’ expertise in growing and distribution has led to many to believe that they could easily move into the high-growth cannabis market if legalization continues to expand. (See also: Tobacco Industry Earnings Reverse Winning Streak.)
Imperial Brands, which officially removed the word “tobacco” from its name 18 months ago, is clearly pushing ahead in its efforts to move beyond its legacy business. Imperial’s new board member is expected to leverage his background at the helm of a supplier of medicinal-grade cannabis oil extract and related products. Langelier also brings in his experience as president of Philip Morris’ next-generation product segment, including e-cigarettes, vape and heat-not-burn sticks called iQOS. Imperial’s chairman Mark Williamson highlighted Langelier’s extensive international experience in tobacco and “wider consumer adjacencies” as assets to the board.
IMBBY shares closed at $46.52 on Wednesday, off 4.5% in the last month. (See also: Imperial Brands Ditching Tobacco for Caffeine.)