Canadian cannabis grower Aphria Inc. surged after a report that it was in talks to sell a stake to Altria Group Inc. in what would be the first tie-up between big tobacco and big pot.

Aphria shares jumped 15 percent to C$20.06 following the Globe and Mail report, which cited unidentified sources who said Altria has expressed interest in acquiring a minority stake in the cannabis producer, although talks could still fall through. Altria shares slipped 0.3 percent to $62.91 at the close of trade in New York at 4 p.m.

Altria said in September that while it intends to “continue to comply with federal law,” it was exploring options and was “mindful of the possibility that in the future cannabis may no longer be illegal under federal law.”

Leamington, Ontario-based Aphria said in a statement that it engages in discussions with potential strategic partners and investors from time to time but “there is no agreement, understanding or arrangement in place with a potential investor at this time.” Representatives for Richmond, Virginia-based Altria, the maker of the Marlboro cigarette brand and holder of a 9 percent stake in Anheuser-Busch InBev SA, declined to comment on the report.

Going Mainstream

If Altria does take a stake in Aphria, it would join a growing list of more mainstream companies that are getting involved in the marijuana space. Coca-Cola Co. said last month that it’s monitoring the industry and is interested in drinks infused with CBD, the non-psychoactive cousin of THC. Constellation Brands Inc. announced a $3.8 billion investment in Canopy Growth Corp. in August and Molson Coors Canada Inc. has a joint venture with Hexo Corp.

In the tobacco sector, Pyxus International Inc. has a 75 percent stake in Prince Edward Island-based Island Garden Inc., while London-based Imperial Brands Plc has an undisclosed stake in closely held Oxford Cannabinoid Technologies.

Philip Morris International, citing potential risks to its reputation and regulatory hurdles, recently said it had no plans to enter the cannabis business.

A deal between Altria and Aphria “makes sense as a defensive and offensive strategic move,” Bloomberg Intelligence analyst Kenneth Shea wrote in a note. “A deal would make Altria a participant in the emerging growth of legal cannabis products in Canada and internationally, and establish a critical partner upon possible U.S. federal marijuana legalization.”

In the wake of Wednesday’s report, the Horizons Marijuana Life Sciences Index ETF, the largest exchange-traded fund that tracks the cannabis industry, gained 1.2 percent.

Walmart Inc.’s Canadian arm said Tuesday that it’s investigating the possibility of selling cannabis-based products but doesn’t intend to get into the much-hyped business yet.