<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In the latest of a series of acquisitions by marijuana stocks, Canada’s Cronos Group (NASDAQ: CRON) has wrapped up its most recent asset buy. The company announced in a regulatory filing that its purchase of four operating subsidiaries of Redwood Holding Group has closed.” data-reactid=”11″>In the latest of a series of acquisitions by marijuana stocks, Canada’s Cronos Group (NASDAQ: CRON) has wrapped up its most recent asset buy. The company announced in a regulatory filing that its purchase of four operating subsidiaries of Redwood Holding Group has closed.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Cronos agreed to buy the subsidiaries last month in a move that gave it control of the upscale Lord Jones brand of cannabidiol (CBD)-based beauty care products. Cronos is paying around $300 million for the subsidiaries, which are based in the U.S. Of that amount, $225 million is to be transacted in cash; the rest is being settled in newly issued shares of Cronos stock.” data-reactid=”12″>Cronos agreed to buy the subsidiaries last month in a move that gave it control of the upscale Lord Jones brand of cannabidiol (CBD)-based beauty care products. Cronos is paying around $300 million for the subsidiaries, which are based in the U.S. Of that amount, $225 million is to be transacted in cash; the rest is being settled in newly issued shares of Cronos stock.
Image source: Redwood Holding Group (Lord Jones).
Referring to its rather frequent acquisitions, Cronos said in the filing that the Lord Jones buy “is one of a number of new growth opportunities that is differentiating our company and our strategic direction.”
It also described its new assets collectively as “a leading U.S. hemp-based products platform.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Cronos received a large pot of money earlier this year when a $1.8 billion strategic investment from tobacco giant Altria (NYSE: MO) closed, a deal in which Altria received a 45% equity stake. This has given Cronos the financial firepower to expand through acquisitions. At the end of its recently reported Q2, the company had over $2.3 billion in cash on its books.” data-reactid=”27″>Cronos received a large pot of money earlier this year when a $1.8 billion strategic investment from tobacco giant Altria (NYSE: MO) closed, a deal in which Altria received a 45% equity stake. This has given Cronos the financial firepower to expand through acquisitions. At the end of its recently reported Q2, the company had over $2.3 billion in cash on its books.
In the cannabis industry, CBD-derived products are considered to be a better way to play the U.S. market.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This is because the flower of the cannabis plant is still illegal to possess or consume in a number of states due to the presence of THC (the substance that gets a user high, as opposed to CBD, which doesn't). Thanks to a federal law enacted at the end of last year, the production and sale of CBD products is now legal throughout the land.” data-reactid=”29″>This is because the flower of the cannabis plant is still illegal to possess or consume in a number of states due to the presence of THC (the substance that gets a user high, as opposed to CBD, which doesn’t). Thanks to a federal law enacted at the end of last year, the production and sale of CBD products is now legal throughout the land.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Goods derived from CBD, such as the skin health offerings sold by Lord Jones, are fashionable among younger American consumers. Lord Jones' line has found a niche thanks to a well-heeled customer base that includes several celebrities, plus coverage in certain high-readership media outlets.” data-reactid=”30″>Goods derived from CBD, such as the skin health offerings sold by Lord Jones, are fashionable among younger American consumers. Lord Jones’ line has found a niche thanks to a well-heeled customer base that includes several celebrities, plus coverage in certain high-readership media outlets.
Now that Lord Jones is fully in Cronos’ possession, it joins a portfolio of other retail brands that includes the Peace Naturals line of medical cannabis, “premium” cannabis producer Cove, and the more youth-oriented marijuana brand Spinach.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="More From The Motley Fool” data-reactid=”32″>More From The Motley Fool
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.” data-reactid=”40″>Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally published on Fool.com” data-reactid=”41″>This article was originally published on Fool.com
