Cronos Archives - Green Market Report

William SumnerMarch 22, 2018


On March 22, 2018, Cronos Group Inc. (CRON) announced that it had entered into an agreement with a series of underwriters, which was co-led by GMP Securities L.P. and BMO Capital Markets, to sell 10,420,000 common shares of the company. Priced at $9.60 per common share, the total value of the deal is approximately $100 million.

This is just the latest good news for Cronos, who has been moving aggressively to consolidate its position in both US and Canadian markets. Earlier in the week, the company announced that it would form a joint venture with MM Enterprises USA, LLC, a cannabis produced and owner of one of the largest retail cannabis dispensaries in the state of California, to develop branded cannabis products and dispensaries.

The company has also granted the underwriters an over-allotment option to purchase an additional 1,563,000 common shares, exercisable up to 30 days following the closing of the deal. If the over-allotment option is exercised, the valued of the deal would be raised to $15 million.

Completion of the deal is contingent upon receiving approval from securities regulatory authorities in both the United States and Canada, including the NASDAQ Global Market and the TSX Venture Exchange. The deal is expected to close on April 6, 2018.

Upon closing the offering, the company hopes to use the proceeds to fund its international operations, expand its capacity, and for general working capital; which includes seeking potential new investment opportunities.

In addition to the bought deal, the company also announced its preliminary 2017 financial results. The company reported that it anticipates its 2017 revenue to be between $3.8 and $4.4 million, compared to $0.6 million in 2016.

The massive increase in revenue is due largely to the inclusion of Peace Naturals Project Inc. revenues for the whole year, whereas the company’s 2016 financial results only included Peace Naturals revenue from September 2016 through the end of the year. The company expects to release its consolidated financial results on or around April 30, 2018.

StaffSeptember 14, 2017


Cronos Group Inc. (PRMCF) announced a private placement for $10 million at a price of $2.25. The proceeds will be used to fund the continued expansion of the company’s production capacity.

Canaccord Genuity analyst Matt Bottomley thinks Cronos Group is still undervalued. “We believe securing additional capacity to supply international markets provides attractive optionality for the company as medical cannabis continues to gain global acceptance; however, we have not updated our estimates for the time being as we await additional updates on Israel’s timing for allowing export sales and construction/expansion benchmarks, as the JV continues to build capacity,” Bottomley said..

There has been a lot happening with Cronos lately. Just a couple of days ago the company also announced that it was the first company to be admitted into the Nasdaq International Designation program using its OTC symbol PRMCF. It’s a platform designed for non-U.S. companies.

“We’ve always had a strong U.S. investor base and that investor base continues to grow. This designation will improve Cronos’ visibility across U.S. capital markets and increase shareholder confidence and liquidity,” said Mike Gorenstein, CEO of Cronos. Having said that, member companies are not listed or traded on the Nasdaq as a result of the designation.

Cronos Group Inc. (PRMCF), just recently delivered its second quarter results. Sales increased 25% sequentially with Cronos reporting $643,000 in revenue over last quarter’s $514,000. The company recorded positive net income of $174,879. The cost of goods sold dropped to $2.18 per gram and management said it expected the costs to continue to decline as two additional facilities ramp up production.

In August Cronos said it had secured $40 million in debt financing with Romspen Investment Corporation to continue expansion of its New Peace Facility. Those plans were outlined in May of this year.

Cronos OTC stock is lately trading at $1.90, which is lower than its 52-week high of $2.65, but has recovered nicely from its 52-week low of 29 cents. The stock’s performance on the Canadian market where it trades under the ticker MJN has experienced an increase of 286% over the past year.  The 52-week range has been 1.58-3.54 in Canadian dollars.

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