Cannabis products are gaining more and more popularity everyday and it is no big surprise that so are the pot stocks. Investing in marijuana stocks is slowly turning into one of the most promising and safest stock opportunities. Over the years, some big players have emerged in the game. And one of the names you should keep your eye on is Cronos Group Inc.
Cronos is a Canadian cannabis group that has a global outreach. They operate within Health Canada’s Access to Cannabis for medical purposes regulations.
Cronos Group Inc. has 100% ownership over Peace Naturals and Original BC (OGBC). Peace Naturals is a licensed company based in Simcoe Country, Ontario producing and selling cannabis for medical purposes. They also cultivate cannabis oil. The farm is 95 acres and operates under the authority of a license issued by Health Canada pursuant to the Access to Cannabis for Medical Purposes Regulation (ACMPR). It was also the first non-incumbent company to be granted a medical cannabis production license by Health Canada.
Original BC is also licensed by Health Canada pursuant to the Access to Cannabis for Medical Purposes Regulation (ACMPR) to produce and sell medical cannabis. Original BC consists of 31 acres farm in the Okanagan Valley, British Columbia.
Cronos Group Inc. also owns 21.5% of Whistler Medical Marijuana Company (WMMC). WMMC is licensed organic by the Fraser Valley Organic Producers Association as well as Health Canada.
Before we get to 2019 predictions, let’s see how Cronos did in 2018. Cronos Group Inc. stocks have gone up and down a lot in 2018. However, this was influenced by the overall stock patterns and does not reflect the instability of Cronos stocks themselves. The last big rise happened due to their deal with Altria Group Inc (NYSE:MO).
Cronos does not only trade in Canada, but also on the Nasdaq Stock Market since February 27, 2018. It was the first pot stock to get listed on the Nasdaq. This has driven a lot of American investors to the company. And the Cronos madness continued till March. March to August was a calm period for Cronos Group. And it was in August that pot industry in general caught fire. All stocks went up and Cronos was no exclusion.
One of the main reasons behind this was the news that Constellation Brands, Inc. (NYSE:STZ) was planning to invest $4.0 billion in Canopy Growth Corp (NYSE:CGC). (Source: “Constellation Brands to Invest $5 Billion CAD ($4 Billion USD) in Canopy Growth to Establish Transformative Global Position and Alignment,” Constellation Brands, Inc., August 15, 2018.) Constellation Brands is a major producer and marketer of wine, beer and spirits in the world. This was when Canopy Growth stocks went up by a whole 73.6%. And it didn’t take long for other pot stocks to follow the trend. In August 2018, Cronos stock climbed by 63.3%. Everything looked great, until the huge sell-off in October. Marijuana stock prices went down and Cronos shares slipped from $11.12 to $7.42. However, Cronos made its comeback pretty shortly by teaming up with one of the largest tobacco companies in the world.
Altria Group, the producer of “Marlboro” cigarettes was rumored to have been interested in investing in Cronos Group early December, 2018. (Source: “Altria in deal talks with cannabis company Cronos Group,” Reuters, December 3, 2018.) The rumor was confirmed by Cronos on the same day. Due to this news the 11% gain was just a beginning of Cronos comeback. It didn’t take long for Altria and Cronos to come to an agreement as huge tobacco company was ready to invest $1.8 billion in the company. And naturally, Cronos stocks went up by another 20%.
“Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth,” said Cronos Chairman, President, and Chief Executive Officer Mike Gorenstein. (Source: “Cronos Group Inc. Announces C$2.4 Billion Strategic Investment from Altria Group, Inc,” Cronos Group Inc, December 7, 2018.)
“The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers,” he continued.
This puts Cronos in a very safe and promising corner. With such a huge investment, the company will be open to a lot of new opportunities and expansion. You could say that for 2019 Cronos is a pretty solid option.
For the quarter, the company generated $3.8 million of revenue, showing a huge 186% increase from the $1.3 million earned in the previous year. (Source: “Cronos Group Inc. Announces Third Quarter 2018 Results,” Cronos Group Inc, November 13, 2018.)
Another big deal that puts Cronos Group Inc. on top of pot stock list is their huge supply agreement with Cura Cannabis Solutions, one of the largest marijuana companies in the world by revenue. The five year agreement means a minimum of 20,000 kilograms of pot sold to Cure Cannabis Solutions every year. Right now, Cronos’ market capitalization stands at more than $2.0 billion.
There is no doubt that Cannabis companies are roaming the stock market right now and they are destined to profit. However, predicting which company will turn out to be the most successful is the catch here and Cronos Group Inc. is definitely one of the strongest competitors.