CRON stock is gaining momentum this morning after Cronos Group Inc. (TSX:CRON) (NASDAQ:CRON) announced that it will acquire a fermentation and manufacturing plant in Winnipeg.
Over the past few years, the cannabis industry has grown at a breakneck pace, and after the legalization in Canada, it picked up steam at an unprecedented rate. From among the companies that went on to become the top players in the industry, Cronos Group was certainly one of those. As a matter of fact, Cronos has managed to remain one of the major players in the industry, and in a new development, the company today announced that it is in the process of making a key acquisition. The acquisition in question is that of a fermentation and manufacturing plant located in Winnipeg, Canada.
When it comes to becoming the biggest companies in the cannabis space, acquisitions and consolidation are generally the way in which companies can grow the quickest. Cronos Group seems to be going in the same direction. More importantly, this new acquisition contains a highly advanced facility that is fully equipped with laboratories that can be used for chemistry and microbiology. For a cannabis company trying to produce new products, it is a highly important factor.
After the plans of the acquisition of this facility from Apotex Fermentation was announced, the investors cheered and CRON stock rose by as much as 3% to $15.76 in early trade on the Nasdaq.
Additionally, it is important to note that the facility in question is also equipped with two large sized areas meant solely for the purposes of fermentation. According to Cronos, those areas will be used for the development of CBD and CBD-based products. Considering the fact that the CBD market is all set to explode over the next couple of years, it is a very shrewd investment from Cronos Group.
The facility will be christened Cronos Fermentation, and it is going to help the company in honoring its agreement with Gingko Bioworks, a company with which it has inked a partnership.
Although CRON stock is up 40% year-to-date, it has fallen 35% since mid-February.
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