Cronos Group Inc. (TSX:CRON) will supply Cura Select with 20,000 kilograms per year of cannabis for a five-year period
SmallCapPower | August 13, 2018: Cronos Group Inc. (TSX:CRON) Thursday announced that it has entered into a supply agreement with Cura Select Canada, Ltd (Cura). As per the agreement, Cronos will supply Cura Select with 20,000 kilograms per year of cannabis for a five-year period, totaling 100,000 kg. The terms of the agreement were not disclosed conclusively, though the management from both the Companies have been optimistic in their commentaries.
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This agreement will bolster Cura’s entry into the Canadian market to supply domestic and international channels. Cura plans to construct its extraction facility on a parcel of land owned by Original BC (OGBC) in the heart of Okanagan Valley, British Columbia. Cronos Group will be selecting and cultivating ideal strains for Cura’s extraction methodology. The new facility is intended to serve as Cura’s hub for the Canadian and international markets.
Cronos Group is a globally-diversified and vertically-integrated cannabis company with a presence across four continents. The Company operates two wholly-owned Canadian licensed producers regulated under Health Canada’s Access to Cannabis for Medical Purposes Regulations: Peace Naturals Project Inc and Original BC Ltd. The Company has multiple international production and distribution platforms including in Germany, Israel and Australia
Cura is a leading provider of premium cannabis oil and hemp oil to the legal U.S. and international markets. Cura has pioneered a highly-refined system that fulfills a scalability and quality need unique to a company of this size, with an ability to produce one million grams of oil per month at each of its facilities. Cura Select is known for its Select Oil and Select CBD brands and offers a variety of white label products with emerging regionally-based and celebrity brands.
Cronos Group Mike Gorenstein CEO said, “We are thrilled to be partnering with one of the cannabis industry leaders in extraction technology and value-added products. This supply agreement is the start to a synergistic collaboration for our newly-created entity Cronos GrowCo and through the structure with Cura, is the type of creative and forward thinking partnership that is at the core of industry leading infrastructure that Cronos seeks to establish.”
Founder, President and Chief Executive Officer of Cura, Cameron Forni said, “Cura’s partnership with Cronos marks a significant step in our mission to be the leading provider of cannabis oil to legal U.S. and international markets. We’re thrilled to work with Cronos to continue our focus on delivering quality-assured, pesticide-free cannabis oil and manufacturing innovative, safe consumer products for the Canadian market and beyond.”
Cronos Group trades at a market capitalization of $1.39 billion with price to book multiple of 9.70x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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