CRON stock is leading the cannabis sector higher after an analyst at Bank of America upgraded Cronos Group's (TSX:CRON) (NASDAQ:CRON) stock.
Big Upgrade
Over the past year or so, Cronos Group has emerged as one of the big-ticket players in the medical marijuana industry, and in a new development, the stock started an upsurge on Wednesday following bullish reports from analysts at Bank of America Merrill Lynch. Christopher Grey at Bank of America gave Cronos Group stock a significant boost by giving it a double upgrade as he classified the stock from underperform to buy.
Grey revised the target price to $20 from $13, and in terms of current levels, that represents a potential appreciation of 39%. Grey believes that the launch of new products, in addition to the inking of new partnerships, is going to propel the company to new heights in the near future.
At the time of writing, CRON stock is trading at $15.61 on the Nasdaq, which puts it up 8.25%. However, the stock has cooled off from a session high of $16.70.
>> Planet 13 Stock Up: Company Beats Forecast for May Customer Traffic
Entering the US CBD Market This Year
Grey's upgrade to CRON stock isn't all that's going well for Cronos Group right now. The company also stated yesterday that it is planning to enter the world’s most lucrative medical marijuana market, the United States, by the end of this year. In an exclusive interview, the founder and Chief Executive Officer of Cronos Group, Mike Gorenstein, stated that the company is headed by Americans and they are going to make a move into the country by the end of the year.
Cronos Group’s footprint in the United States could be bigger than any other multi-state operator currently plying its trade in the United States, and that is primarily due to the company’s strategic tie-up with tobacco giant Altria (NYSE:MO), which acquired a 45% stake in the company for $1.8 billion. That partnership gives Cronos the opportunity to have a foothold with as many as 200,000 retail outlets and tobacco farmers, who could easily switch to cultivating marijuana.
That being said, it is necessary to point out that the regulatory climate is going to have a big say on Cronos Group’s ultimate success in the United States in the long run. Gorenstein stated that he is perfectly happy to announce that the company is going to launch its signature CBD products in the country at some point in 2019.
CRON stock is up about 40% so far in 2019, but down about 35% from its recent peak price of $25.
Featured image: Canva
