Altria Group Inc (NYSE: MO.N), the U.S. maker of Marlboro cigarettes is in discussion with Canadian cannabis producer Aphria Inc. (TSX: APH.TO), according to Canada’s nationally syndicated newspaper the Globe and Mail.

A deal could lead to a bigger deal

While details haven’t been made public, it seems Altria’s long-term goal is to increase its stake to majority ownership. They are just the latest consumer company declaring they’ll invest in Canada’s cannabis companies in the lead up to legalization there, starting Oct. 17.

Pot stocks popped

The news sent Canadian cannabis stocks higher, in spite of being down for most of the trading day. Aphria Inc. shares moved up as much as 20.70 percent following the news, which is unconfirmed by either company. Altria shares also gained 2.2 percent on the leak before finishing the day down slightly.

While Altria will “continue to comply with federal law,” it would explore options. Representatives said they’d be “mindful of the possibility that in the future cannabis may no longer be illegal under federal law.”

Philip Morris International, on the other hand, stated it has no plans to engage in the cannabis business. They cited reputational risks and regulatory hurdles.

Sector finished flat

Following the news, the Horizons Marijuana Life Sciences Index ETF, the exchange-traded fund tracking the cannabis industry, was up 2.5 percent. Canopy Growth Corp. also added 2.3 percent and Aurora Cannabis Inc. rose 1.6 percent. Each of those finished the day flat to slightly down, while Aphria remained in the green.