Cronos Group Inc (NASDAQ: CRON) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced that it has entered into multiple supply agreements that will likely lead to strong revenue growth. Of course, the news excited investors who are sending the stock screaming for the top. Today, we’ll talk about:
- The supply agreements;
- what we’re seeing from CRON as a result; and
- what we’ll be watching for ahead.
CRON Heads Up On Supply Agreements
As mentioned above, Cronos Group is having an overwhelmingly strong start to the trading session this morning after the company announced that it has entered into supply agreements. In a press release issued early this morning, the company announced that it has signed initial supply agreements for retail distribution that are both government-operated and private, of its cannabis related products as it prepares for the launch of the recreational cannabis market in Canada in October.
In the release, CRON said that it has secured listings and signed binding master supply agreements with Ontario Retail Cannabis Corporation as well as the BC Liquor Distribution Branch. Importantly, these agreements cover more than 50% of the Canadian population, so the potential audience here is incredible.
In the release, the company also said that it has accepted supplier terms with the Nova Scotia Liquor Corporation and Prince Edward Island Liquor Corporation. Under the terms of these agreements, CRON will be providing dried flower, pre-rolls and highly rated oils to both government operated retail stores and online platforms. In a statement, Mike Gorenstein, CEO at CRON, had the following to offer:
Cronos is excited to provide our premium quality products to Canadian consumers for the upcoming legalization and launch of the recreational market… Day one we are ready to build and establish our brand through our premium products and we are committed to building strong relationships with the provinces and our customers.
What We’re Seeing From the Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of CRON, the news proved to be overwhelmingly positive. After all, the audience for the company’s products will be greatly expanded in October and moving forward as a result of these agreements. Therefore, we can expect to see a strong ramp up in revenue. So, it comes as no surprise that excited investors are sending the stock screaming for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:58), CRON is trading at $7.99 per share after a gain of $0.67 per share or 9.15% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CRON. In particular, we’re interested in following the recreational cannabis launch in Canada and the revenue generated by the company due to its preparations for this launch. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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