Altria Group Inc, through its subsidiary Altria Summit LLC, has relinquished a warrant to buy more shares in Cronos Group Inc (NASDAQ:CRON, TSX:CRON) sending shares in the Canadian cannabis company, 5.9% lower.
In March 2019, Altria acquired, through its subsidiaries, a 45% stake in Cronos plus the warrant which was exercisable until March 8, 2023, at a price of C$19.00 per share.
Prior to abandonment of the warrant, Altria, owned around 41% of Cronos, and, by fully exercising the warrant, could have increased this to around 52% (or 240,816,760 Cronos shares).
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But given the closing share price of Cronos common shares on December 15, 2022 was C$3.81 and the shares have not traded above C$6.00 over the past 12 months, Altria has decided to abandon the warrant.
Altria said it expects to claim a capital loss of $483 million on its US federal consolidated income tax return for 2022 as a result.
It said it will continue to hold the shares in Cronos for investment purposes and will continue to review whether it should buy or sell shares in the group.
Shares in Altria Group Inc were also lower, down 1%.
Contact Jeremy at jeremy@proactiveinvestors.com