"Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria", Howard Willard, Altria's chairman and chief executive officer said in a statement.
FOX Business breaks down other companies that have eyed investments in the cannabis industry below. "This is just another stamp of approval that there is a huge opportunity in cannabis and that it is a legitimate industry". Altria's offer of C$16.25 a share represents a 16 percent premium from Thursday's closing price.
Canopy has said it will not sell marijuana products in the US until pot is legalized at both the federal and state level.
Altria will pay an additional $1.4 billion for warrants that, if exercised, would give Altria a 55% ownership stake in the Toronto company.
With U.S. smoking rates falling fast, Richmond, Virginia-based Altria is under pressure to find new avenues to expand revenue. The transaction is expected to close in the first half of 2019.
Cronos will remain a Canadian company, headquartered in Toronto, Gorenstein said.
"We plan to use a lot of it this to open new markets and keep growing out, but our innovation hub is Peace Naturals in Canada, and that will continue", he said. It has entered into joint ventures to boost its presence and capacity in Canada and overseas, including in Israel and Australia.
Cronos said it will use the capital to accelerate its global growth and expansion, as well as research and development.
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The deal grants Altria the option to acquire a controlling stake in Cronos at CAD $19 per share and to nominate four executives to Cronos Group's board of directors.
The Marlboro maker's $2.4 billion bet on Cronos is by far the largest move by Big Tobacco into cannabis, and bodes well for the overall sector, said Martin Landry, an analyst with GMP Securities.
As well, US tobacco leaf merchant Alliance One International said its subsidiary acquired a 75 per cent equity stake in Charlottetown-based Canada's Island Garden in January.
In June, British tobacco giant Imperial Brands was among investors taking a stake in Oxford Cannabinoid Technologies, a United Kingdom-based medical cannabis startup.
As part of the deal, Altria will buy 146.2 million of newly issued Cronos shares at $16.25 per share for a 45 per cent stake.
This story will be updated throughout the day.
Prior to Friday's announcement, Cronos had confirmed reports that it was in talks with Altria.