Cronos (CRON)

History of the Company

The Cronos Group was founded in 2012 by Michael Gorenstein in Toronto, Canada. Gorenstein has been the company’s CEO since May 2016. Cronos is his brainchild, having seen the possibilities of the cannabis market early on. As a dual Canadian / US Citizen, he was able to invest in the nascent Canadian marijuana industry.

Gorenstein formed partnerships early, including one with Phil Fontaine, head of the Assembly of First Nations in Canada, as well as a German pharmaceutical company, with a view to developing and selling legally produced cannabis.

Probably more than any other member of the cannabis market, Cronos is about partnerships. To make, market and distribute its products, it owns or part-owns Peace Naturals, Original BC and the Whistler Medical Marijuana Company (WMMC). Gorenstein sees the future success of Cronos as one of strategic investment in research, development and opening new markets when they appear.

Trading Cronos: What You Need to Know

  • Interest in Cronos started to pick up at the end of 2017. Trading on the Canadian TSX and the NASDAQ in the USA, Cronos jumped to $8.48 USD on 5 January 2018.
  • After a turbulent year, along with the rest of the cannabis market, Cronos had risen to an all time high value of $12.88 by Monday 10 December 2018.
  • After the uncertainty of the Christmas period experienced across US markets, Cronos rallied slightly at the start of 2019. As of 3 January, its NASDAQ share price was a relatively healthy $11.54 USD.
  • In keeping with its policy of making strategic partnerships, Cronos succeeded in securing a deal with Altria in late 2018. Altria is the parent company of Philip Morris Inc., and makes Marlboro cigarettes, the tobacco giant’s biggest selling global brand.
  • The deal with Altria has nothing to do with smoking, cannabis or otherwise. Altria’s backing means that Cronos can invest in its own infrastructure as it sees fit. As the world awaits developments in the regulatory framework regarding cannabis, in the USA more than anywhere else, this puts Cronos in a very strong position.
  • Altria’s experience of fighting legal prohibitions and striking deals could be one of Cronos’ most valuable assets going forward. Regulatory battles are something of a forte for the tobacco companies’ lawyers. Again, this could keep Cronos a step ahead of its competitors.
  • Cronos has also recently formed a partnership with Ginkgo Bioworks. This company specializes in secondary cannabinoid products, the potential value of which is as yet unknown. Perhaps not in 2019, but in future years, these could add significantly to Cronos’ value.

Anyone wanting to invest in Cronos stocks should first study the likely trends in the cannabis market in 2019.

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