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Monday, November 30, 2020

Cronos Group Inc (OTCMKTS:PRMCF) Uplisting Could be a Sign of Things to Come

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Cronos Group Inc (OTCMKTS:PRMCF) has become one of the most prolific players in the global cannabis space over recent months. PRMCF has been raking in the cash and now sits on nearly a 30-to-1 ratio of cash to current liabilities on the balance sheet, which accompanies nearly 1,850% in quarterly year/year sales growth. With those numbers in place, it’s no wonder that the company just announced a major uplisting on the way this week.

The company just announced that trading of its common shares in the United States will be elevated from the Nasdaq International Designation program to the Nasdaq Global Market (“Nasdaq”). According to the release, “Cronos Group expects that its common shares will begin trading on Nasdaq on February 27, 2018 under the trading ticker symbol CRON. Cronos Group will retain its listing on the TSX Venture Exchange (TSX-V) under the symbol MJN.”

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 has been putting together big numbers, which has placed it in a position to receive an uplisting to the Nasdaq global exchange. That type of move is a clear validation. However, we would expect that it is almost more important for other players in the space because it signals a willingness by the mainstream to accept this sector as a new valid source of tickers on the big boards.

As such, while it will no doubt allow for more access by the company to institutional investment capital, we may actually see strong peers rally in the days and weeks ahead as secondary plays on the same theme.

“This up listing to NASDAQ is a major corporate milestone and reflects the significant progress we have made in strengthening our corporate governance and expanding our global footprint,” said Mike Gorenstein, CEO of Cronos Group. “We believe this will increase long term shareholder value by improving awareness, liquidity, and appeal to institutional investors.”

The chart shows 7% tacked on to share pricing for the listing in the past week. This is emblematic of the stock. PRMCF has a track record that includes a number of dramatic bounces. Furthermore, the listing has seen interest climb, with an increase in recent trading volume of exceeding 120% over the long run average.

Currently trading at a market capitalization of $1.1B, PRMCF has a significant war chest ($16.5M) of cash on the books, which compares with 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%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. 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.

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