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GAME CHANGER

December 5, 2018

 


On December 3, 2018, we presented  WORTHLESS CANNABIS INVESTMENTS  on our Cannabis News pages, which claimed that one of the ten worst public cannabis based companies, Cronos Group Inc. (CRON)  ranked number 6  on our list.

 

CRON closed at  $10.58 with a market capitalization of   $982.7 million and less than $10 million in sales sported a low DG  rating of 4. In essence, CRON cannot survive  as a cultivator. The Game Changer is the talks with Altria Group, Inc. (MO) $54.46.    The potential link up with CRON and the maker of Marlboro cigarettes changes the algorithm fashioned by our Subjective Probability- Game Theory Model.  The revised indicator is the branding potential. Under the takeover scheme, CRON will become an exclusive branding play.


Altria Group, Inc.,  (MO) through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States. It offers cigarettes primarily under the Marlboro brand; cigars principally under the Black & Mild brand; and moist smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands. The company also produces and sells varietal and blended table wines and sparkling wines under the Chateau Ste. Michelle, Columbia Crest, and 14 Hands names; and imports and markets Antinori, Torres, and Villa Maria Estate wines, as well as Champagne Nicolas Feuillatte in the United States. . The company sells its tobacco products primarily to wholesalers, including distributors; large retail organizations, such as chain stores; and the armed services.


CRON has confirmed the discussion with MO, claiming the likelihood of its sale as a move to diversify from traditional smokers.  While no agreement has been reached, the noise is too close to the source to be discounted as “hot air.”   A full report on CRON will be the issue on December 7, 2018.


Since last year our proprietary SP-TGM algorithm predicted moves by the relevant commercial organizations into  firms supporting cannabis-based products.  The proposed takeover of CRON is a further  example that national brands will dominate the cannabis sector. The trend has been visited before when other prized commodities evolved into low-profit margin ingredients, while the end products garnered the commercial successful  — companies that value branding as an essential element will reap most of the rewards.

 

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