Cronos Stock Trades in Green After Signing Supply Deal with MediPharm

Cronos stock

Cronos Group (TSX:CRON) (NASDAQ:CRON) said Thursday that it has extended its cooperation with MediPharm Labs (TSX:LABS) (OTCQX:MEDIF). The two cannabis companies have disclosed a new supply deal. We don't know the financial details yet, but the cooperation is being well received. At least, today it is, with Cronos stock currently trading in the green.

Here's what we know.

Cronos Stock: The Latest and Greatest

Cronos Group and MediPharm Labs have an existing relationship, with MediPharm signing a contract in May with CRON, agreeing to supply it with bulk resin and cannabis concentrates. And this week, they have extended that relationship by signing a multiyear contract manufacturing agreement. On Thursday, news spread that MediPharm will contribute to Cronos's COVE line of cannabis products by filling and packaging vaporizers. Cronos Group appears optimistic about the new contract, with CEO Mike Gorenstein saying the following: "Working with MediPharm Labs gives us the quality and optionality that we are looking for as we introduce our proprietary vape pen formulations."

He continued:

"We are committed to continuing to lead the industry responsibly as derivative products are introduced to the expanding Canadian marketplace."

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Gorenstein might be optimistic about Cronos's continued relationship with MediPharm, but the market seems divided. Neither company did well on the market Thursday, with Cronos stock closing down around 6%. But it's a new day, and the stock is currently trading in the green on the Nasdaq Exchange. At the time of writing, CRON stock is trading at $10.29, putting it up 0.59%. MediPharm is doing better Friday as well, currently up 2.78%. Maybe, however, Cronos's result on the market today has more to do with MKM partners giving the cannabis stock a neutral rating Friday than the deal with MediPharm.

Takeaway

In the coming weeks, there will be two things cannabis investors will want to keep an eye out for. First, it will be interesting to see what the financial details of the new supply deal are. Second, watching the movement of Cronos stock will indicate whether investors really are skittish about Cronos Group's new connection to vaping.

What do you think about the deal? Let us know your thoughts in the comments below.

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