And There's Cannabis, Too!
As more and more states give their approval to medicinal and recreational use of marijuana products, the major tobacco companies will be the biggest consolidators, scooping up all the significant players in the field and putting them under one roof to benefit from economies of scale.
Thirty states and the District of Columbia currently have laws broadly legalizing marijuana in some form.Eight states and the District of Columbia have adopted the most expansive laws legalizing marijuana for recreational use. Most recently, sales of recreational-use marijuana in California kicked off on Jan. 1. In Massachusetts, retail sales of cannabis are expected to start later this year in July. Voters in Maine similarly approved a ballot measure legalizing marijuana in 2016. The state, however, has not yet adopted rules for licensed marijuana growers or retailers, nor has it begun accepting licenses. Gov. Paul LePage vetoed a bill that would have established a legal framework for sales of the drug.
The tobacco majors are holding back for now, as the federal government continues to resist legalizing the product. As that eventually evolves from State pressure, both PM and Altria will be waiting in the wings to start operations. This new product segment will present both companies with additional avenues for profit.
Each is offering current dividend yields twice that of the S&P 500 and twice that of inflation. This should give an investor comfort that his dividend income will not lose purchasing power, especially in light of strong CAGR of the dividend from both companies. https://seekingalpha.com/article/4146305-philip-morris-gets-morgan-stanley-corner