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1. Key tobacco metrics are declining in developed markets
The biggest impetus for Big Tobacco to seek out a partnership or investment opportunity with the marijuana industry is declining usage and shipment volume in developed markets. Within the U.S., the percentage of U.S. adults smoking cigarettes has declined from around 42% in the mid-1960s to just 15.5% as of 2016. The industry is also facing marketing, advertising, and branding restrictions in key developed markets around the globe.
For example, Altria (NYSE: MO), which is best known for its premium Marlboro brand in the U.S., reported a 6.3% sales decline in smokable products during the second quarter of 2018, as well as a 3.7% decline through the first half of the