Cronos Group Stock CFD Investment Options

Overview

Cronos Group Inc., (Formerly known as PharmaCan Capital Corp) is a Canada-based global cannabis company with a worldwide presence. The Company was founded in 2013 by Michael Gorenstein (Chairman, President & CEO) and today has international production and distribution across five continents.

Cronos Group is a principal investment company and today it operates through its subsidiaries and licensed producers, such as Peace Naturals Project Inc, Whistler Medical Marijuana Company (WMMC), and Original BC Ltd. All of them are licensed by Health Canada to produce and sell medical marijuana as well as cultivate cannabis oil. The Company has multiple international production and distribution platforms. It focuses on building an international brand portfolio and developing intellectual property.

Cronos Group Inc. (NASDAQ: CRON), is the last of the big Canadian cannabis producers who recently reported earnings for the Q4 2018. Just like for its main rivals, the revenue increased substantially (5.6 million in Canadian dollars in Q4, a 248% increase over the prior-year period), but so did losses as the company is in the active growth and expansion phase.

The Toronto-based weed company reported a net loss of C$7.04 million ($5.3 million), which amounts to 4 cents a share, after a profit of C$1.10 million, or 1 cent a share, in the year-ago quarter. The company’s sales rose 186% to C$3.76 million and it sold 514 kilograms of pot during the quarter, a 213% increase.

 

Cronos Group Inc. (NASDAQ: CRON)

Since the US “Farm Bill” has passed, Cronos is peering into the American market as the next step for expansion outside of Canada.

The so-called “Farm Bill” that came into power at the end of 2018 legalized hemp in the US. Hemp is sometimes referred to as the marijuana “cousin”, which has negligible-to-zero psychoactive effect and is used for medical as well as industrial production.

As for now, Cronos does not have assets in hemp or cannabidiol, (a non-psychoactive compound found in marijuana) so the US market is out of reach just yet, but it’s positioning itself to take advantage of adult recreational cannabis as soon as it becomes legal for import. (Though some US states have already legalized the recreational adult use, it is still impossible to import weed from outside of the country until it’s not allowed at the all-state federal level.)

Cronos is currently active in both the recreational and medical markets with a portfolio of companies and partnerships in other countries, such as medical distribution agreements in Germany and Poland, a joint venture in Australia, a licensed producer of medical cannabis in Israel and operations in Colombia waiting for its license.

As CEO Michael Gorenstein recently advised that the company plans, in the long run, are not to be in the cannabis growing business, instead, they see the marijuana industry in terms of chemistry.

In support of that claim, Cronos has secured a key $100 million partnership with a privately held American biomedical company called Ginkgo Bioworks. As a result of this deal, Ginkgo will use its own technology (new DNA design and print) to create and produce target cannabinoids at industrial scale through industrial fermentation in Cronos’s interest.  The latter claims it should eventually drop the cannabinoids production costs to less than $1,000 per kilogram and enable the mass-produce of cannabinoids that currently account for less than 1% of a typical marijuana plant.

Processing cannabis for recreational use is still the biggest challenge for Cronos, again much like its competitors. The company leaders assure it can grow enough pot to meet its current demands, but transforming the raw marijuana plants into the POS-ready packaged goods with obligatory federal excise stamp is yet a challenge to accomplish.

And a recent $1.8 billion deal with Philip Morris parent company Altria Group Inc. will surely help to sort this. A strategic deal that gave the tobacco giant control over 45% of Cronos brought the latter the opportunity to work with Altria on vaporization technology, as well as pre-rolled cannabis products and working with regulatory bodies, an area in which the Marlboro maker has significant experience.

Gorenstein (Cronos CEO) says that can help to sort the final step in Cronos’s process of turning marijuana into a standard consumer product since Altria has the expertise to transform the design into a product that can deliver consistent results. Automation is another place where the expertise that Marlboro-maker Altria Group Inc. brought to the table as part of its investment might come in useful.

Cronos stock has gained 162% in the past year, including a near-doubling after it made the Altria investment public in December.

Benefits of the CFD investments

CFD trading enables you to take advantage of the price fluctuations of financial instruments such as public stocks, indices, ETFs and others. In other words, the investor enters a contractual agreement with the CFD broker to exchange the cash difference in price between the opening and closing prices of the contract. The main difference between CFD trading and share trading is when you trade a CFD, you don’t need to buy the underlying share, but can still benefit if the market moves in your favor.

Leveraged Trading. With CFD being a leveraged product, you only need to deposit a small percentage of the full value of the trade in order to open a position, since you don’t actually own the asset or instrument you have chosen to trade. This allows traders to open larger positions than their capital would otherwise allow. In Cannabis stocks the maximum leverage is usually in the range of 5% to 20% of the actual stock full price.

Diversified Risks. Bioscience companies in general, and Cannabis companies specifically, represent a volatile sector, and as such are high-risk investments, mainly due to ambiguous legal status. By trading an index versus owning a stock itself,  you can:
Enter the investment on a smaller scale than would typically be required to own a package of stocks
Close the investment quickly if you identify a need

Many major traders have recently added cannabis stocks CFDs in their offerings, and Top 10 CFD Brokers expert team is happy to present you the analysis.

Cronos Group CFD

Cronos Group Inc. (NASDAQ:CRON) CFD openings are available for purchase and trade with:

Trade Cronos Group Stock with Plus500

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Benefits of CFD trading with Plus500:

  • Leverage of up to 1:5 on cannabis share CFDs. The broker claims that one can start trading with as little as £100 to gain the leveraged effect of £500 investment.
  • Initial margin: 20%
  • Tight spreads as well as no trading commissions.
  • Access to advanced risk management tools, most of which are completely free of charge. Stop Losses and Limits to lock in your profits and minimize risk.
  • Variety of CFDs on leading producers of medical cannabis-related products (and cannabinoid derivatives), such as Canopy Growth, Cronos Group, Tilray, Aurora Cannabis, and GW Pharmaceuticals.

Trade Cronos Group CFD with Plus500

Other Brokers

IG – Margin/leverage: 25% (1:4) (0 – 5000 Shares)

Xtrade -Margin/leverage: 10% (1:10)

Libertex  -Margin/leverage: 20% (1:5)

Fortrade -Margin/leverage: 10% (1:10)