Cronos Group Stock Forecast Shows Big Potential with Australia Expansion

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Why Cronos Stock Soared Today

Cronos Group Inc (OTCMKTS:PRMCF), (CVE:MJN), a smaller-cap marijuana company, made big waves today as Cronos stock climbed double digits by late morning on Tuesday following the announcement of Cronos Australia Pty Ltd.

The announcement stated the grant of medicinal cannabis cultivation and research licenses in Australia.

“The launch of Cronos Australia as our newest international hub marks an important milestone for the Company. Cronos is focused on providing pharmaceutical grade medicine to patients in need, and we are excited that our Australian team shares this vision and commitment,” said Mike Gorenstein, CEO of Cronos Group, in a statement. (Source: “Cronos Group Announces Launch of Cronos Australia with Grant of Two Licenses,” Business Insider, February 5, 2018.)

As I’ve mentioned time and again, companies that look to expand internationally rather than solely focus on the Canadian market in the leadup to legalization are poised to be the true, long-term winners in the marijuana market, rather than fly-by-night fronts that simply take advantage of the momentum in the industry, only to flare out in a few years or months.

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Cronos stock (MJN stock in Canada) had, like most of the marijuana industry, skyrocketed in value toward the end of 2017, only to have its flirtation with double digits cut short as it fell to a low point of about $5.50. But it has since recovered well, climbing its way back to $6.58 as of the writing of this article, with a rally seemingly in store for the industry following the tough past few weeks.

The Cronos Group news, coupled with the market rally in marijuana stocks, makes this a stock definitely worth watching, especially if you’re in the market for a smaller-cap penny stock in the marijuana industry.

We frequently profile some of the larger companies, and that is by design. These companies have all the makings of solid, long-term investment prospects, whereas penny stocks carry with them the risk/reward that some investors live for but others dread.

Cronos, with a market cap below $1.0 billion, is in a good spot as it isn’t exactly tiny, but it is small enough that those seeking higher volatility (and therefore more possible gains) will have that itch scratched, should they put money in Cronos stock.

My Cronos stock forecast, following the Australia news, is positive. I believe that the highs the marijuana industry attained in January are real but they just occurred a little too quickly.

prmcf stock chart

Chart courtesy of StockCharts.com

I believe that MJN stock will hit double digits again within a few months. As the industry continues to rally, we’re going to see most companies get back to those highs and recover from the January slump.

It’s also worth noting that Australia appears to be a hot destination for weed companies in 2018.

Canopy Growth Corp (OTCMKTS:TWMJF), (TSE:WEED) similarly signed a deal down under to provide medicinal marijuana to the country.

The international perspective is great to see among these companies and shows that they looking ahead beyond Canadian marijuana legalization.

Analyst Take

I firmly believe that Cronos stock will again hit double digits within several months. That would amount to nearly 50% gains, should I prove correct.

It is currently making the right moves by expanding internationally, it has the strength of being a small-cap, mobile, marijuana company that is more likely to experience wild swings but also more likely to hit bigger gains in the short-term.

Consider that—even with the slump—the Cronos stock value was worth one-third of what it is now. And it looks likely to go up from here.