Altria, one of the world’s biggest tobacco companies, is spending nearly $13 billion to buy a huge stake in the vape company Juul as cigarette use continues to decline.

The Marlboro maker said Thursday that it will take a 35 percent share of Juul, putting the value of the company at $38 billion, larger than Ford Motor Co., Delta Air Lines or the retail giant Target.

“We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes,” Altria Chairman and CEO Howard Willard said in a prepared statement.

E-cigarettes and other vaping devices have been sold in the U.S. since 2007 and have grown into a $6.6 billion business, and it is already intersecting with another seismic shift in the U.S. – the legalization of marijuana across the U.S.

The investment comes about two weeks after Altria stepped into the cannabis market with an investment of around $2 billion in Cronos Group, the Canadian medical and recreational marijuana provider.

North American consumer spending on legal cannabis is expected to grow from $9.2 billion in 2017 to $47.3 billion by 2027, according to Arcview Market Research, a cannabis-focused investment firm.

Altria Group Inc. isn’t the only major corporation trying to incorporate marijuana sales.

This week Anheuser-Busch InBev, the maker of Budweiser, partnered with medical cannabis company Tilray in a $100 million deal to research cannabis-infused drinks for the Canadian market. In August, Constellation Brands announced a $4 billion investment in another Canadian pot producer, Canopy Growth Corp., the largest to date by a major U.S. corporation in the cannabis market.

With nicotine-based vaping, devices heat a flavored nicotine solution into an inhalable vapor. They have been pitched to adult smokers as a less-harmful alternative to cigarettes, though there’s been little research on the long-term health effects or on whether they help people quit.

The growing popularity of e-cigarettes has alarmed a number of health officials.

There is a scramble in the U.S. to reverse a recent explosion in teen vaping that public health officials fear could undermine decades of declines in tobacco use.


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