Marlboro cigarette maker Altria is in early stage talks to acquire Canadian cannabis producer Cronos, as it seeks to diversify its business beyond traditional smokers, people familiar with the matter told CNBC.
Cronos has not agreed to any deal and there is no certainty it will do so, the people said.
The news comes as Altria is also eyeing a significant minority stake in e-cigarette company Juul, people familiar with the situation have told CNBC.
The people asked not to be identified because the matter is confidential. Altria did not immediately respond to a request for comment, while Cronos said in a statement that it "confirmed that it is engaged in discussions concerning a potential investment by Altria Group ... in Cronos Group."
"No agreement has been reached with respect to any such transaction and there can be no assurance such discussions will lead to an investment or other transaction involving the companies," the company's statement said.
Reuters first reported the talks between Altria and Cronos.
The deal talks come as the tobacco industry is under pressure. Cigarette sales have declined as older smokers are dying and fewer young people are starting to smoke. Last year, cigarette smoking in the U.S. fell to its lowest point in recorded history, according to data from the Centers for Disease Control and Prevention.
At the same time, both the cannabis and e-cigarette industries are growing.
Counting both legal and black market sales, the total demand for pot is approximately $52.5 billion, Marijuana Business Daily has reported. The e-cigarette market meantime, is projected to hit $6.6 billion in the U.S. this year, according to Wells Fargo analyst Bonnie Herzog.
Correction: This article has been updated to state that the e-cigarette industry is growing.