Cronos Stock on Nasdaq Takes Off
Cronos Group Inc (NASDAQ:CRON, CVE:MJN) has made one of the most decisive moves in the marijuana industry…and it doesn’t have anything to do with marijuana. Instead, Cronos stock has soared on the back of the company having its stock listed on the Nasdaq.
Getting on the Nasdaq is, as you could expect, a huge deal because it makes Cronos an easy target for an influx of hungry U.S. investors who weren’t keen on over-the-counter stocks or investing on lesser-known Canadian listings.
Being on the Nasdaq lends the company legitimacy that many others in the marijuana market simply cannot match. Not to mention that being the first and only company that enjoys this privilege will mean that for as long as it maintains that advantage, CRON stock is likely to benefit.
Here’s the thing—I thought that the boost to Cronos stock would be a flash in the pan. Not that the company doesn’t have a lot going for it. It does. My initial instincts, however, were that Cronos stock would see a jump in value following the listing on Nasdaq and then fall back to earth. A week later, there is one scenario that may play out and see the company reap long-term gains as a result of being the only Nasdaq-listed Canadian marijuana stock.
Cronos stock has climbed nearly 36% in the past week. While I don’t expect this massive growth to last—and I do predict a correction in the company’s future—the company could see strong gains if it remains the only marijuana stock or one of a handful of Canadian marijuana stocks on prominent American stock markets like the Nasdaq.
The longer that the company remains the only option for American investors who won’t invest on Canadian markets or in over-the-counter stocks, the longer it can be an attractive target for investors eager to get into the market before it grows beyond the optimal entry point.
Without competition, it will act as a monopoly of sorts for skittish American investors who only invest on the Nasdaq or New York Stock Exchange (NYSE) or other big name markets.
Chart courtesy of StockCharts.com
The Nasdaq also lends Cronos stock credibility that investors who are scared off by the political and legal underpinnings of the marijuana industry may be willing to overlook due to it being listed on a stalwart market like the Nasdaq.
So what’s the Cronos stock forecast? In my mind, the company could still climb at least another 10% on the back of this Nasdaq boost, but I do believe that a correction will hit in the aftermath of this rapid gain.
What’s important to watch is how the stock responds over time. The fast gains are all well and good, but they are partly based on hype and excitement. How the stock reacts to a downshift in that excitement is key to whether Cronos will see long-term benefits due to the Nasdaq listing. I believe that it will, so long as it remains one of the few Canadian marijuana stocks on the listing.
Cronos stock has a strong outlook for reasons outside of the Nasdaq listing, but the move to the powerful stock market is going to play a dominant part in the Cronos stock forecast for a long time yet.
As such, I believe that as long as the company remains one of the few marijuana stocks listed on the listing and the company bounces back from an inevitable correction in its future, there’s a good chance that Cronos stock will be in for strong gains moving forward.