Cronos Group (NASDAQ: CRON) stock price tumbled sharply since the beginning of this year. The shares are down 26% year to date, down almost 50% from 52 weeks high that it had hit at the end of the first quarter.
The share price selloff is supported by trader’s concerns over lower than expected growth in demand.
In addition, increasing market competition and a low entry barrier for new players have been hindering the upside momentum. Higher valuations contributed to the selloff.
Buy Cronos Group Stock Price on Dip
Cannabis markets experienced a significant boost after it is legalized in several U.S. states. Some research firms believe the market has the potential to reach $200 billion valuations in the coming years.
Consequently, cannabis-related companies have been aggressively expanding their production and footprints to capitalize on the emerging market.
Stifel believes with C$2B of cash in the bank along with backing from Altria (NYSE: MO) provides Cronos Group unconstrained ability to capitalize on the $200B global cannabis opportunity. Stifel increased CRON ratings to Buy, saying “Crowning a New King in the North.”
Cronos Group Expanding In U.S. and Canadian Markets
The company is taking several steps to expand its presence in Canadian and U.S. markets. It has established a new global R&D center in Israel, opened Cronos Device labs, and announced the acquisition of a new state-of-the-art fermentation facility in the latest quarter.
CRON is seeking to capitalize on increasing demand from the U.S. markets. Consequently, it has recently acquired Redwood Holding’s hemp-based CBD platform.
The CEO said, “As we look ahead, we will continue to capitalize on this momentum by building on our partnerships with Altria and Gingko Bioworks and leveraging our collective resources and expertise to realize the significant potential in the growing cannabis industry.”
Overall, the Cronos Group stock price is likely to bounce back in the coming days. This is because of the potential growth in the cannabis markets. The recent selloff is only due to market-related uncertainties – which are short-term in nature.
