Stocks

Cronos Downgrade Is Actually A Buying Opportunity

The global marijuana / medical marijuana industry is forecasted to be at least a $500 billion industry and we are just in the first inning of a nine inning ball game. 

And there are many companies out there that want to be a player and not a spectator in the game.  The most recent homerun was in December when President Trump signed the Farm Bill into law to legalize the production and sale of hemp and cannabidiol (CBD) derived from the hemp plant.

This past week, Altria Group, Inc. (MO) announced the completion of its approximately USD $1.8 billion investment in Cronos Group Inc. (NASDAQ: CRON).  Cronos is a leading global cannabinoid company and one of the up and coming major players in the space.  Having the backing of Altria will alowl Cronos to increase production and expansion worldwide.

Altria brings to the table its vast distribution system and regulatory expertise. And the cash it’s injecting in Cronos will allow it to scale up its production and accelerate its international expansion plans.

Cronos was downgraded this week after BMO Capital Markets became the latest house to downgrade due to overvaluation.

NOTE: GMP Securities downgraded Cronos to hold from buy in February.

The downgrade appears to be warranted as Cronos has risen 100% year to date.  I think the downgrade will lead to an opportunity on the pull back to go long Cronos.  Lets go to the charts to find that level.

The global marijuana / medical marijuana industry is forecasted to be at least a $500 billion industry and we are just in the first inning of a nine inning ball game. 

And there are many companies out there that want to be a player and not a spectator in the game.  The most recent homerun was in December when President Trump signed the Farm Bill into law to legalize the production and sale of hemp and cannabidiol (CBD) derived from the hemp plant.

This past week, Altria Group, Inc. (MO) announced the completion of its approximately USD $1.8 billion investment in Cronos Group Inc. (NASDAQ: CRON).  Cronos is a leading global cannabinoid company and one of the up and coming major players in the space.  Having the backing of Altria will all Cronos to increase production and expansion worldwide.

Altria brings to the table its vast distribution system and regulatory expertise. And the cash it’s injecting in Cronos will allow it to scale up its production and accelerate its international expansion plans.

Cronos was downgraded this week after BMO Capital Markets became the latest house to downgrade due to overvaluation.

NOTE: GMP Securities downgraded Cronos to hold from buy in February.

The downgrade appears to be warranted as Cronos has risen 100% year to date.  I think the downgrade will lead to an opportunity on the pull back to go long Cronos.  Lets go to the charts to find those levels.

On the weekly chart, the chart suggests to buy on the pull back to the weekly demand level at $15.

or buy on the pull back to the daily demand level at $18.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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