Could Big Tobacco Become Big Marijuana?

The problem that the drug industry would have, however, is that marijuana would, at its core, be a commodity item. While this could lead the real benefit to fall to generic drug companies like Israel's  Teva Pharmaceuticals (NYSE:  TEVA ) , that may not be as realistic an outcome. For starters, even generics focused companies have been migrating to branded drugs. Secondly, and perhaps more importantly, marijuana is a plant. It needs to be farmed, not created in a lab. The one industry that has a history of dealing with a commodity plant is the tobacco industry.

Moreover, thanks to  Altria's (NYSE:  MO ) Phillip Morris and its push to get tobacco regulated by the U.S. Food and Drug Administration, Big Tobacco is now completely accustomed to dealing with the government regulation that would likely surround the growing, harvesting, and sale of marijuana and marijuana based products. In addition, the companies in this industry have massive distribution networks that could easily be adapted to handle a new product going to new customers. And, like the drug companies, tobacco companies, particularly in a mature market like the United States, are looking for ways to deal with the slow decline of their main product, cigarettes.

While Altria may not be a first mover, it isn't beyond imagination to see a smaller player testing the waters. Or, perhaps, new entrants that eventually get swallowed by the big guys once the stigma of marijuana fades.

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