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Cronos Group Inc. (NASDAQ: CRON) Invests $110.4 Million to Acquire a 10.5% Ownership Stake in PharmaCann

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The use of cannabis is growing in popularity among medicinal patients. As a result, researchers and regulators are increasing their engagement on its use and benefits. Mergers and acquisitions of cannabis companies have also taken an upward trend, the latest being between Cronos Group Inc. (NASDAQ: CRON) and PharmaCann. Through a definitive agreement, the innovative global cannabinoid company will procure a nearly 10.5% ownership stake in PharmaCann. 

The move comes when many countries, including Israel, Germany, and Australia, have taken up legalization seriously, having legalized the use of cannabis for specific medicinal purposes. In addition, some states in the United States have also headed to the call of legalization. 

The Two Have a Broad Geographic Footprint and Scalable Operating Models

The duo’s strategic alliance will cost Cronos Group a whopping $110.4 million, which is already in the hands of a third-party paying agent for direct distribution to PharmaCann shareholders. And in justifying the investment, Cronos Group President and Chief Executive Officer Kurt Schmidt, says “…PharmaCann has a disciplined capital allocation, a compelling licensed manufacturing and a retail footprint….”

Indeed, PharmaCann is one of the nation’s largest privately-held cannabis companies with a broad geographic footprint in the US. The company has operational licenses in New York, Illinois, Ohio, Maryland, Pennsylvania, Massachusetts, six production facilities, and 23 dispensaries. In addition, CEO Brett Novey emphasizes their mission of continued expansion to enhance a solid asset base.  And the end goal is to improve people’s lives through cannabis. 

Cronos Group has not been left behind either. The company boasts of international production and distribution across five continents. Schmidt says they are enthusiastic about assembling a best-in-class brand portfolio and repositioning themselves to deploy their products in the US market. The company’s partnership with PharmaCann explains its shared commitment to elevate product quality and make cannabis users feel comfortable.  That said, they are constantly investing in research and the development of new forms of cannabinoid-based treatments.

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