LONDON — British American Tobacco is looking at selling cannabis products as it seeks to find new sources of revenue beyond cigarettes and vaping.
Kingsley Wheaton, the company's chief marketing officer, told CNBC's "Squawk Box Europe" on Wednesday that CBD, or cannabidiol, is one of the consumer spaces that it has its eye on.
CBD is an active ingredient in cannabis that is derived from the hemp plant, which is a cousin of the marijuana plant. Its health benefits have been widely touted by manufacturers but scientists say more research needs to be done.
"We are indeed going to think about, and we are going beyond, just the tobacco and nicotine space," said Wheaton, who added that CBD is an "exciting growth area for our business for the future."
Wheaton's comments come shortly after two cannabis companies listed on the London Stock Exchange, but BAT remains cautious.
"It's a very different regulatory landscape as you go around the world and many markets remain currently inaccessible for regulatory reasons," said Wheaton.
"We draw a very big distinction between CBD and other forms of cannabis," he said. "We're interested in CBD. But I think the bigger point is we're trying to build the portfolio of the future for our business. We're trying to build the brands of the future. We're trying to meet consumer needs that smoking used to meet with a new transformed portfolio."
BAT launched a CBD vaping product called Vuse in January that comes in mint, mango, and berry flavor, and it has two strengths — 50mg and 100mg.
The Vuse product is being sold through a pilot in Manchester. "It's there now," said Wheaton. "We're testing and learning and understanding that."
British American Tobacco shares fell 5.7% on Wednesday morning despite the world's second-largest tobacco company beating profit estimates before the bell.
He added that the pandemic has allowed BAT to "more radically shake up" the way it does business and transform from a "tobacco company to a company which is more about technology."