Cronos focusing more on disruptive products rather than worrying about low revenue or growing enough legal pot

Is Cronos Group a pot producer ... or a tech company? According to Cronos CEO Mike Gorenstein, investors should consider looking at some Canadian pot companies like their disruptive tech peers as the sector continues to show low revenue figures in the early days of legalization. That comes as Cronos generated $5.6 million in its fourth quarter while posting a loss of $11.8 million. Gorenstein tells BNN Bloomberg that the company isn't spending much of its time worried about growing enough cannabis for the legal market. Its plans are focused on longer-term ventures such as building brands for cannabis derivative products such as vape pens and other items tied in with its Altria investment partners. 

U.S. pot banking measure will likely pass on Wednesday: Cowen

The Secure and Fair Enforcement Banking Act, also called the “SAFE Act,” will likely be passed by a U.S. House committee, but a final vote may not occur until Wednesday, according to an analyst with Cowen Group. If passed, the bill would allow U.S. banks to service cannabis firms that comply with state laws. Cowen analyst Jaret Seiberg called the bill “positive for banks and cannabis companies” in a note to investors. The U.S. House Financial Services Committee started debating a number of bills Tuesday afternoon, including the cannabis banking bill.

Legalization plans stall in Northeast U.S. after N.J., N.Y. falter 

It doesn’t look like there’s going to be much movement in legalizing pot in the U.S. Northeast, according to Bloomberg. New Jersey lawmakers recently scrapped a planned vote on legalizing the drug, while New York’s governor cast doubt on the ability to strike an agreement in his state despite falling behind its neighbour in the race for lucrative marijuana revenue. The tri-state region, which also includes Connecticut, could have a combined legal cannabis market exceeding US$5 billion by 2022, second only to California – the world’s leading marijuana market, according to BDS Analytics. Meanwhile, the situation in Massachusetts, where sales started in November, isn’t faring any better as the state has been grappling with supply shortages, much like its northern neighbour.

Europe’s CBD market could be US$1.7B opportunity, despite regulatory complexities

The European market opportunity for cannabidiol – the cannabis compound du jour that’s better known as CBD – is forecast to grow at a heady clip over the next several years, but the continent is rife with a complex regulatory patchwork that could make the sector difficult to navigate, according to a new report by Brightfield Group. The market research firm said consumer spending in Europe’s CBD market was estimated to be US$318 million last year and could grow to nearly US$1.7 billion by 2023, based on increased awareness of new cannabis-infused products and a streamlined regulatory regime. But that growth is expected to be more gradual than other markets such as Canada and the U.S. as the fragmented nature of the continent means that CBD is consumed in a variety of ways that would make a scalable business difficult to operate.

Aphria chair predicts $1B revenue by end of 2020 amid production boost

Aphria’s interim CEO and Chairman Irwin Simon said the company should reach $1 billion in revenue by the end of 2020, and also described Green Growth Brands’ proposed takeover deal as “not a real offer.” The pot firm is also seeking to increase production throughout its Canadian operations, Simon said. He added that the company should achieve margins of at least 40 per cent based on a significant boost at its cultivation facilities, notably at the company’s home of Leamington, Ont. Once every facility is operating at full capacity, Aphria should be able to grow as much as 255,000 kilograms of cannabis a year, up from 35,000 currently. Simon also said Aphria is not currently looking for a new CEO, and won’t begin a search until he feels the company has “stabilized.”

DAILY BUZZ

“I feel so glad that I’m involved in an industry where I can help people.” 
- David Klein, founder of Jelly Belly and president of Spectrum Confections, on making cannabis-infused jelly beans.

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