Cronos Group cannabis is set to grow! Cronos Group (NYSE:CRON) share price rose yesterday at a double-digit rate, which is assumedly in response to the Senate vote to marijuana legalization in Canada. The vote is to take place Today. The Canadian government is planning to legalize adult use cannabis – which they believe will generate more than $600 billion for the Canadian economy.
Cronos Group is one of the biggest players in the Canadian cannabis industry. It is the first cannabis company which is also listed on the New York stock exchange.
Cronos Group Cannabis in a Leading Position
The latest development from Canadian government has enhanced future fundamentals of Cronos Group considering its leading position. The company already started launching recreational brands to capitalize on increasing demand from U.S. and Canadian markets.
Cronos Group, for instance, recently announced a joint venture with MedMen Enterprises USA, LLC. This venture will concentrate on research and development activities surrounding cannabis use in Canada, and will also create branded products and retail chains across different Canadian provinces.
Cronos has also been expanding its cannabis oil sales since Health Canada approved its new extraction laboratory. Cannabis oil sales accounted for 29% of domestic medical patient revenue in the first quarter of this year.
“Fiscal 2017 was a building block year which set the groundwork and foundation for the results achieved in the first quarter. Cronos is focused on continuing to increase capacity to serve existing distribution and newly established markets, developing intellectual property and launching recreational brands,” said Mike Gorenstein, CEO of Cronos Group.
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Stable Cash Position Supports Growth Initiatives
The company appears to be in a robust cash position to support its growth activities. It has raised $100 million of gross proceeds in the first quarter through a bought deal offering. The company’s sales rose 474% year over year in the first quarter. This indicates that the company’s growth strategies are allowing it to capitalize on increasing demand.
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