Altria Group said it has taken a significant stake in Canada’s leading cannabis company, an aggressive move by the Marlboro cigarette maker to enter the burgeoning market for non-traditional smoking products.

Altria (MO) announced on Friday that it agreed to buy a 45% stake in Cronos Group (CRON). At $16.25 per share, the price tag on that investment comes out to about $1.8 billion USD ($2.4 billion CAD) — the largest investment in the marijuana industry by a U.S. tobacco company to date.

As part of the agreement, Altria will have the option to increase its stake in Cronos by an additional 10% at $19 CAN a share. Altria also gets to nominate four directors, including one independent director, to serve on Cronos’ Board of Directors.

Cronos shares climbed nearly 25% on the news while Altria had gained roughly 2%. Shares of other cannabis companies rallied after the announcement, as well, with Canopy Growth (CGC) up 4.15% and Tilray (TLRY) up 2.99%.

Why is Altria Investing in Cronos Group?

Like its tobacco industry peers, Altria is seeking alternative sources of revenue as cigarette sales slow. Altria controls 46% of the U.S. market for traditional cigarettes, but its stock has declined more than 20% over the last year as the company weathers declines in traditional smokers and the threat of a U.S. ban on menthol cigarettes.

Cigarette smoking has reached the lowest levels ever recorded among U.S. adults, according to a recent study from the Centers for Disease Control and Prevention, but Altria's market capitalization has managed to stay above $100 billion.

Although Altria is getting into the cannabis game, that doesn’t mean the tobacco company is giving up on cigarettes just yet. On Nov. 28, 2018, the Wall Street Journal reported that Altria was in talks to take a significant minority stake in e-cigarette maker Juul Labs Inc. Although details of the deal are still emerging, investing in Juul could give Altria a window into the rapidly expanding but increasingly controversial e-cigarette market. Juul is a three-year-old company based out of San Francisco, but the e-cigarette producer has already seized three-quarters of the e-cigarette market and boasts a valuation of $16 billion.