Cronos Group (TSX:CRON) (NASDAQ:CRON) has sold its stake in Whistler Medical Marijuana Corp to Aurora Cannabis (TSX:ACB) (NYSE:ACB). Cronos made the announcement in a press release earlier today. Both company stocks are down as a result.
CRON stock is down almost 4% at the time of writing, selling for $20.86 USD on the NASDAQ. ACB stock is down 2.53%, selling for $7.14 USD on the NYSE.
The decline is most likely attributed to Cronos's sale of its stake in Whistler Medical Marijuana Corp as investors mull the sale to Aurora Cannabis.
Cronos Group Down on Whistler Sale
Cronos had a 19% stake in Whistler Medical Marijuana Corp, which it sold to Aurora Cannabis for 2.5 million ACB shares, worth approximately $24.6 million CAD, along with a further $7.6 million CAD upon reaching certain milestones.
Whistler was one of Canada's first licensed cannabis producers. Cronos paid out $175 million CAD at the time for its stake.
CEO of Cronos Group Mike Gorenstein said the following on the news:
"Whistler’s commitment to creating high-quality products and establishing a premium brand has generated value for consumers and investors alike. We are proud to have been part of their growth and look forward to their progress through this venture."
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In premarket trading, CRON stock was up 2%; however, it has since declined. Today's decline is nothing much to worry about, though. In the grander scale of things, Cronos Group has gained 131% in the last 12 months.
Cronos and Altria
2018 was an exciting year for cannabis. A wave of recreational marijuana legalization—including all of Canada and multiple US states—kickstarted an industry now opening its doors to other fields such as tobacco and beverages. With consolidation happening across the board, major companies from different areas are making bedfellows of cannabis brands.
Cronos was cemented as one of the leaders in its industry when tobacco giant Altria (NYSE:MO) invested $2.4 billion CAD into the cannabis producer in December.
About Cronos
Vertically integrated Cronos Group is the fifth-largest Canadian cannabis company by market cap. It has a global reach with a footprint across five continents.
It operates under two wholly-owned brands—Peace Naturals Project and Original BC. Peace Naturals focuses on medical cannabis, and Original BC, based in BC, has its focus on the recreational arm of the cannabis industry.
The company is expected to release its financial results and hold its Full Year and Fourth Quarter 2018 Earnings Conference Call on March 26th.
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