Cronos Group Inc (OTCMKTS:PRMCF) is a stock we suggested readers take a close look at back in October. The company continues to gain traction, starting to gain extraordinary traction in both sales growth and cash from operations, with over $16M now in the coffers as of its latest reporting, and nearly 2,000% in y/y growth on a quarterly basis. And we’re talking about a company with under a million in current liabilities.
Is it any wonder we have seen shares vault over sevenfold higher since September? And this is a Canadian play biting at the heels of the larger competition. An upstart with a diversified geographic footprint well-placed to sidestep recent turmoil in the US cannabis patch. Hence, larger capital is looking for opportunities to move in, as evidenced by the company’s most recent announcement detailing a rising tide in the dollar amount for its latest bought deal, as we cover in more detail below. Suffice it to say, having to increase the size of a funding move is almost always a sign of strength.
Cronos Group Inc (OTCMKTS:PRMCF) trumpets itself as a principal investment firm operating in the Canadian cannabis space.
The firm seeks to invest in companies either licensed, or actively seeking a license, to produce medical marijuana pursuant to Canada’s Marihuana for Medical Purposes Regulations. The firm typically invests in companies based in Canada.
The firm is primarily an equity investor, may also advance debt as appropriate. It seeks to make minority investments with appropriate governance and shareholder rights. The firm seeks board representation consistent with the size of the investment, but does not need control. Cronos Group was incorporated in January, 2013 and is based in Toronto, Canada.
According to company materials, “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. The Company’s flagship LPs, Peace Naturals Project Inc. (Ontario) and Original BC Ltd. (British Columbia), are collectively situated on over 125 acres of agricultural, licensed land. Cronos Group is focused on building an international iconic brand portfolio, providing patients with personalized care and creating value for our shareholders.”
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As noted above, the company just announced that it has entered into a revised agreement with a syndicate of underwriters led by PI Financial Corp., to increase the size of its previously announced bought deal financing to approximately $40 million aggregate gross proceeds, representing 4,571,429 shares of the Company, at a price of $8.75 per Share.
According to the release, “the Company intends to use the net proceeds of the Offering for general corporate purposes, to fund growth, and for research and development. The closing date of the Offering is scheduled to be on or about January 26, 2018 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and the applicable securities regulatory authorities.”
We’ve witnessed approaching 160% added to share values of the stock over the past month of action. Market participants may want to pay attention to this stock. PRMCF has a history of dramatic rallies. Moreover, the listing has registered increased average transaction volume recently, with the past month seeing 460% over the long run average.
Now commanding a market cap of $1219.2M, PRMCF has a significant war chest ($16.5M) of cash on the books, which is balanced by about $869K in total current liabilities. PRMCF is pulling in trailing 12-month revenues of $5.3M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 1840.4%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $PRMCF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $PRMCF, either long or short, and we have not been compensated for this article.