Cronos Group Inc. (OTCMKTS: PRMCF, and CVE: MJN), formally known as PharmaCan Capital Corp., is one of several Canadian companies working diligently to position itself for the inevitable legalization of recreational marijuana to soon become a reality in Canada. Fulfilling a campaign pledge made during the last election cycle, Prime Minister Justin Trudeau introduced legislation on April 13, 2017 to legalize the recreational use of marijuana (cannabis) in Canada.Although there are a few hurdles that the proposed legislation will need to overcome, most supporters are confident that it will eventually become law, and marijuana will be legal as a consumer product. Canada already has a flourishing medical marijuana industry which has existed since 1999 when marijuana was legalized for medical use. Once Trudeau’s legislation becomes law, a significant expansion of the industry will take place. The expanded demand for marijuana resulting from recreational use for the entire country of Canada will present an excellent opportunity for companies that are already well established in the industry.Cronos Group, is a geographically diversified and vertically integrated cannabis company that operates two wholly-owned Licensed Producers (“LPs”) regulated within Health Canada’s Access to Cannabis for Medical Purposes Regulations (the “ACMPR”) and holds a portfolio of minority investments in other Licensed Producers and ACMPR applicants. The company’s flagship LPs, Peace Naturals Project Inc. (Ontario), and In The Zone Produce Ltd. (British Columbia) are collectively situated on over 125 acres of agricultural land and are currently licensed to produce 2,600 kg of cannabis on an annual basis. The Company also holds minority equity positions in Licensed Producers Whistler Medical Marijuana, Hydropothecary, and Abcann Medicinals. With interest in five Licensed Producers and two LP applicants, Cronos Group is focused on building an iconic brand portfolio, providing patients with compassionate and personalized care, and creating value for our shareholders.
Cronos Group’s has been on a steady upward trend since mid-July of 2016. Its currently trading US$2.24. Current market capitalization stands at US$314.58 million, on 119.58 million shares outstanding as of April 17, 2017A series of positive press releases about the company going back the end of 2016 have contributed to the uptrend. On December 28, 2016, the company announce the execution of an exclusive supply agreement with German-based Pedanios GmbH (“Pedanios”) for the distribution of medical cannabis products in European markets. Pursuant to the agreement, which has an initial term of three years, Cronos will be the exclusive North American supplier of cannabis products to Pedanios for distribution into the European Union and Switzerland.On January 11, 2017, Cronos Group announced that the company’s wholly-owned subsidiary, In the Zone Produce Inc. (“ITZ”), had been approved by Health Canada to sell medicinal cannabis pursuant to the Access to Cannabis for Medical Purposes Regulations (“ACMPR”). ITZ may immediately begin selling cannabis directly to medical patients throughout Canada, and this sets the stage for the development of new ITZ branded platforms in anticipation of the recreational expansion plans.On February 27, 2017, Cronos Group was recognized as the top performer in the 2017 TSX Venture 50, an award reserved for the best performing publicly traded companies on the TSX Venture Exchange over the past year. Cronos Group delivered the highest stock price appreciation in the Diversified Industries sector and has continued this momentum into 2017. The TSX Venture 50 is a ranking of the top ten performing companies from each of the five industry sectors including Clean Technology and Life Sciences, Diversified Industries, Mining, Oil & Gas, and Technology.On March 9, 2017, Cronos Group announced that it closed its previously announced bought deal public offering, including the full exercise of the over-allotment option. As such, a total of 7,705,000 common shares of the Company were sold at a price of $2.25 per Share for aggregate gross proceeds of approximately $17.3 million. The Company intends to use the net proceeds of the offering for expanding production capacity at Peace Naturals Project Inc. and In The Zone Produce Ltd..In its most recent press release on March 9, 2017, Cronos Group announced that it now owns a 21.5% stake in Whistler Medical Marijuana Corp. (“WMMC” or “Whistler”). WMMC has been granted an affirmation letter from Health Canada regarding the company’s announced 65,000 square foot Phase I expansion in Pemberton, British Columbia. Cronos Group decided to maintain its 21.5% equity position through an additional $1,085,000 investment to help support WMMC’s next phase of growth. Whistler was among the very first licensed producers in Canada. In addition, Whistler plans to build another 80,000 square foot indoor cultivation facility with its Phase II expansion, and possesses an option to expand on a neighboring 160 acre land parcel in the future.The aforementioned press releases cover everything from international distribution agreements, to acquiring government licenses, being recognized for market performance, closing of capital raising deals, and a significant expansion. The entire gambit of a well-run company in a growth mode was included. Overall, the bull run looks set to continue for Cronos Group. We will be updating our subscribers as soon as we know more. For the latest updates on MJN/PRMCF, sign up below!Disclosure: We have no position in MJN/PRMCF and have not been compensated for this article.
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