Best Canadian Tobacco Stocks: Top Targets for 2025

Canadian tobacco stocks don’t get much hype — but that’s exactly why some traders watch them. They can be slow and steady dividend plays, but every so often, news hits (like a regulation change or product pivot), and boom — the volatility shows up. That’s what I care about. I’m not here to hold these stocks for 20 years. I’m here to watch them for patterns, catalysts, and opportunities. If you want boring long-term income, fine. But if you’re looking for trades, this guide breaks down what to watch in the Canadian tobacco space this year.

Readers should dive into this article because it offers a deep dive into the Canadian tobacco industry’s unique blend of stability and volatility, providing valuable insights for savvy traders.

I’ll answer the following questions:

• What exactly are tobacco stocks?
• How has the Canadian tobacco industry evolved?
• What are the current trends in tobacco and cigarettes?
• How are declining smoking rates affecting tobacco stocks?
• What is the significance of the rise of vaping and cannabis in tobacco stocks?
• Which are the top Canadian tobacco stocks for 2025?
• What are the advantages and risks of investing in Canadian tobacco stocks?
• Is it ethical to invest in tobacco stocks?

Let’s get to the picks!

What Are Tobacco Stocks?

Tobacco stocks are shares of companies that make and sell tobacco products — but these days, that usually includes a lot more: vaping, cannabis, even nicotine pouches. The old-school cigarette market is shrinking, so the big players are trying to pivot. That’s what traders need to watch. It’s not just about who sells the most smokes — it’s who’s adapting fastest. And that shift creates volatility, which can = opportunity.

Brief Overview of the Tobacco Industry

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The tobacco industry encompasses companies that produce, market, and distribute tobacco and related products. Investors often eye tobacco stocks for their potential to deliver steady dividends, despite the industry’s challenges. These stocks represent a sector known for its resilience and consistent demand, though it’s also marked by regulatory headwinds and health concerns.

The Evolution of the Canadian Tobacco Industry

The Canadian tobacco industry is shrinking — plain and simple. Fewer smokers, more regulations, and a public health push toward a smoke-free future.

Companies aren’t rolling over. They’re investing in alternatives — vaping, cannabis, nicotine delivery tech — and that’s where the volatility comes from. These pivots can trigger big stock moves (up or down).

As a trader, you don’t need to believe in the product — you need to understand the reaction.

Declining Smoking Rates

Smoking rates in Canada have been on a decline, influenced by health awareness and tobacco control regulations. This trend impacts tobacco companies, which must navigate the changing landscape and adapt to maintain their market share and profitability.

While Canadian tobacco stocks are navigating a complex landscape, the energy sector presents a different kind of opportunity. Top oil stocks in Canada are drawing attention as the industry recovers from historical challenges and looks towards a future with sustainable practices. These stocks are becoming increasingly attractive for traders who are keen on diversifying their portfolios and tapping into the potential of Canada’s vast natural resources. For those interested in the oil sector, here are the top oil stocks in Canada that are making waves and may be worth watching as we approach 2025.

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Trends in Tobacco and Cigarettes

Despite declining smoking rates, there remain levels of consistent demand within certain tobacco categories. The industry sees periodic shifts in consumer preferences, such as the fluctuating popularity of various cigarette brands or the introduction of new products.

The Rise of Vaping and Cannabis in Tobacco Stocks

The tobacco sector is witnessing a significant shift with the rise of vaping and the integration of cannabis products. These changes represent both opportunities and risks for tobacco companies as they diversify their product ranges and navigate new regulatory environments.

The intersection of vaping and cannabis with tobacco stocks is reshaping investment strategies. Similarly, the renewable energy sector is experiencing a surge, with best renewable energy stocks in Canada emerging as top picks for forward-thinking investors. As the world shifts towards greener solutions, these stocks offer a blend of innovation and sustainability that could lead to significant growth. For traders looking to expand their horizons beyond traditional sectors, these renewable energy stocks in Canada represent a dynamic market segment with promising prospects.

Top Canadian Tobacco Stocks for 2025

My top Canadian tobacco stock picks are:

• OrganiGram Global Inc (NASDAQ: OGI)
• Altria Group Inc. (NYSE: MO)
• British American Tobacco PLC (NYSE: BTI)
• Japan Tobacco Inc. (OTCPK: JAPAY)
• Philip Morris International (NYSE: PM)

I’m not here to hype these stocks — this is a watchlist, not a buy list. I don’t trade based on sectors — I trade setups. But understanding where these companies are headed helps me prep for when volatility shows up. Here are five names with exposure to tobacco or nicotine-related moves. I’ll only trade them if they fit my pattern criteria.

The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

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OrganiGram Global Inc (NASDAQ: OGI)

My first Canadian tobacco stock pick is OrganiGram Global Inc (NASDAQ: OGI).

Organigram just rebranded to Organigram Global, signaling a shift from Canadian cannabis operator to international player. They’ve secured the number one market share in Canada and are actively building their global footprint with exports to Europe and strategic investments in Germany and the U.S.

They’re pursuing EU-GMP certification — a critical step for scaling international medical exports — and have equity in Sanity Group, a key player in Germany’s recreational pilot projects. British American Tobacco remains a major backer, and the company’s international push could create news-driven volatility.

It’s not a traditional tobacco stock. But if you’re watching how big tobacco moves into cannabis, this is a key one to track.

Altria Group Inc. (NYSE: MO)

My second Canadian tobacco stock pick is Altria Group Inc. (NYSE: MO).

Altria still gets most of its revenue from cigarettes, and that’s a shrinking market. Their investment in Juul turned into a write-down disaster, but they’ve since pivoted to Njoy — an FDA-authorized vape brand they acquired for $2.7 billion.

So far, Njoy is showing some growth, but not enough to offset the volume losses in smokables. That hasn’t stopped Altria from doing what it’s always done: pay a huge dividend and buy back shares. The yield is still above 7%, and they just approved a $1 billion repurchase plan for 2025.

It’s not a fast mover most of the time, but earnings beats, regulatory headlines, or shifts in the vaping narrative can bring in short-term volume.

British American Tobacco PLC (NYSE: BTI)

My third Canadian tobacco stock pick is British American Tobacco PLC (NYSE: BTI).

British American Tobacco is facing the same pressure as its peers — declining cigarette volumes, public health headwinds, and a long transition into reduced-risk products like vapes and nicotine pouches.

Their “new category” portfolio now makes up nearly 20% of revenue, but the pivot isn’t moving fast enough to replace declining combustibles. Cigarette volumes fell 5% last year, and that’s after multiple years of similar drops. They’ve managed to keep investors around with aggressive dividends, but the payout ratio is getting tight.

If they accelerate cost-cutting or surprise with stronger-than-expected growth in next-gen products, it could move. Until then, it’s one to monitor for any signs of a breakout or breakdown.

Japan Tobacco Inc. (OTCPK: JAPAY)

My fourth Canadian tobacco stock pick is Japan Tobacco Inc. (OTCPK: JAPAY).

JT just completed its acquisition of Vector Group, expanding its U.S. footprint and distribution network. It already owns 62% of the Japanese cigarette market and holds strong positions across Asia. Now it’s taking steps to scale in the world’s second-largest tobacco market.

Goldman Sachs recently upgraded the stock to Buy with a higher target, citing improved cash flow, earnings growth, and a rising dividend outlook. JT has historically lagged in reduced-risk product adoption, but recent moves suggest they’re playing catch-up with a more aggressive global strategy.

It’s not a fast-paced chart, but there’s value in watching how the Vector acquisition plays out — especially if it sparks operational updates or new product rollouts in North America.

Philip Morris International (NYSE: PM)

My fifth Canadian tobacco stock pick is Philip Morris International (NYSE: PM).

Philip Morris is executing one of the most successful pivots in the space. Nearly 40% of its revenue now comes from smoke-free products like IQOS and Zyn — and both are scaling fast in Europe, Asia, and the U.S.

Unlike Altria, which is still trying to find footing in vaping, PM already has a diversified nicotine product line gaining international traction. Revenue, profits, and operating income are all trending up. They’re also starting to lean harder into U.S. expansion after acquiring full rights to sell IQOS domestically.

This isn’t the most volatile stock on this list, but the growth story in next-gen nicotine is real. For traders, it’s a benchmark — one to watch for earnings surprises, regulatory developments, or a shift in sector sentiment.

Advantages and Risks of Investing in Canadian Tobacco Stocks

Investing in Canadian tobacco stocks comes with its own set of advantages and risks. On one hand, these stocks often provide attractive dividend yields and a history of stable earnings, appealing to those seeking steady income. On the other hand, the industry faces ongoing risks from regulatory pressures, public health campaigns, and a declining number of smokers. Investors must weigh these factors, considering both the financial returns and the potential for future industry disruptions.

As a trader, I’m less interested in dividends and more focused on catalyst-based volatility. You need a plan for both sides: when stocks spike on news — and when they tank on lawsuits, restrictions, or government crackdowns.

It’s no longer smart to look at tobacco on its own — now investors have to consider the burgeoning market of cannabis. Weed stocks in Canada have seen a rise in popularity, thanks to legalization and growing acceptance. These stocks might carry a different risk profile compared to traditional tobacco stocks, but they also offer a new avenue for potential gains. For investors curious about this evolving market and looking for top picks, these weed stocks in Canada could provide an alternative path to diversify and potentially capitalize on the green rush.

Advantages of Investing in Canadian Tobacco Stocks

• High dividends = long-term interest from funds
• Less volatile than high-flyer sectors (until they’re not…)
• Long-term product demand in some markets

Risks of Investing in Tobacco Stocks

• Shrinking user base
• Constant regulatory pressure
• Public sentiment = negative (which limits upside potential)

Ethical Considerations in Tobacco Investments

Ethical considerations play a significant role in the decision to invest in tobacco stocks. The industry’s link to health issues such as cancer, heart disease, and the impact of secondhand smoke prompts many to think twice. Investors are increasingly factoring in ESG (Environmental, Social, and Governance) criteria, which can influence the value and performance of tobacco companies. The ethical debate often extends to the services these companies provide and their role in promoting smoke-free alternatives.

Is it Ethical To Invest in Tobacco Stocks?

People love to debate the ethics of trading tobacco stocks. Here’s my take…

I don’t trade based on morals — I trade based on patterns. That’s it. If a stock is volatile and fits my setup, I’ll trade it. I’m not holding it for years, I’m not endorsing the company — I’m just reacting to opportunity in the market.

You don’t have to agree with every product a company makes to trade a quick breakout or dip buy. That’s the reality of being a trader.

What matters more to me is what I do with my profits. I’ve donated millions through the charity I founded, Karmagawa, to support education, wildlife conservation, and communities in need all over the world. That’s where I choose to make an impact — not by pretending my trades are moral statements.

You’ve got to decide what works for you. But if you’re serious about learning to trade, focus on the process. Focus on the setups. Don’t get caught up in the noise.

Key Takeaways

Tobacco stocks in Canada may not be flashy — but they’re not dead either. Some offer short-term volatility tied to news, M&A, or regulatory changes. Others just grind along. Either way, understand the why behind the moves. Don’t get stuck holding just because a company pays dividends. Track the volume, study the trend, and wait for your setup.

Trading isn’t rocket science. It’s a skill you build and work on like any other. Trading has changed my life, and I think this way of life should be open to more people…

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We don’t accept everyone. If you’re up for the challenge — I want to hear from you.

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Trading is a battlefield. The more knowledge you have, the better prepared you’ll be.

What Canadian tobacco stocks are on your watchlist? Let me know in the comments — I love hearing from my readers!

Frequently Asked Questions

How Have Tobacco Stocks Performed Historically?

Historically, tobacco stocks have been considered defensive investments, often providing steady dividends. However, they are not immune to market fluctuations and regulatory pressures.

What Are the Potential Future Trends in the Canadian Tobacco Industry?

Future trends may include increased regulation, the growth of vaping and cannabis sectors, and continued efforts in smoking cessation.

Are There Any Other Industries Similar to Tobacco Stocks for Investment?

Similar industries might include alcohol and fast food, where consumer habits and regulatory scrutiny play significant roles in the companies’ performance.

What Are the Top Canadian Tobacco Stocks To Invest In?

When looking at Canadian tobacco stocks, investors often consider companies like IMBBy and well-known brands such as Lucky Strike. These companies can be part of the ETFs focusing on tobacco and consumer goods sectors. For those investing directly in stocks, financial results and market positions are crucial pieces of information to review before making investment decisions.

How Do Acquisitions Impact Tobacco Company Stocks?

Acquisitions in the tobacco industry, such as a major tobacco company buying out a competitor, can significantly impact stock value. These business moves can result in increased market share and a stronger business model, leading to potential growth in investor money and market performance.

Where Can I Find Information on Tobacco Stocks?

For current and historical data on tobacco stocks, investors can refer to financial sites and pages dedicated to stock market information. These often provide detailed charts and analysis to aid in decision-making. Additionally, company acquisition news can be critical, as it can dramatically affect a tobacco company’s stock price and market positioning.

Is There a Market Trend of Quitting Tobacco Stocks?

The trend of quitting tobacco use can influence the stock market, as it impacts the business outlook for tobacco companies. This social situation is sometimes reflected in market sentiment and may affect ETFs that hold tobacco stocks. Investors should keep an eye on industry charts and visit financial sites for updates on such trends.

How Do Beverage Acquisitions Affect Tobacco Stocks?

When a tobacco company expands into the beverage industry through acquisition, it can diversify its business and reduce the risk associated with the tobacco market alone. However, investors should consider the health implications, such as lung concerns, which can influence public opinion and the company’s results. Watching market analyses on YouTube and other platforms can provide a broader perspective on such situations.

Are There Plenty of Canadian Tobacco Stocks To Choose From in Canadian Markets?

While Canadian markets may not have a vast array of tobacco companies compared to some other sectors, there are still a notable few that stand out. Investors looking for exposure to this industry have a selection, though not plenty, which includes some of the most well-known names in tobacco. These companies are typically featured in market analyses and can be included in various ETFs that cover sin stocks or specific market niches related to tobacco.