Cannabis Weekly Round-Up: Cronos Exploring Sale Options

Speculation swirls about major cannabis deal

According to a Reuters report published on Thursday (July 6), Cronos Group (NASDAQ:CRON,TSX:CRON) is in early talks regarding a sale of the company, potentially to Curaleaf Holdings (CSE:CURA,OTCQX:CURLF).

Unnamed sources familiar with the matter told the news outlet that Cronos has recently received "unsolicited indications of interest from third parties," and the company has confirmed this news.

"Cronos is in the initial stages of reviewing these indications of interest, and there can be no assurance that any agreement or transaction will result therefrom," the company said.

Cronos has financial backing from tobacco giant Altria (NYSE:MO).

Curaleaf Holdings issued a statement in response, saying it will not comment on market speculation.

"The Company does not intend to make further comment unless required by law," the firm said in its statement.

Operator fees in Canada grow for fourth year in a row

A report from MJBizDaily notes that unpaid regulatory fees from Canadian cannabis operators have reached almost C$4 million, a 200 percent increase from a year ago, as companies struggle to make ends meet.

These fees have been increasing since 2019 and amount to 2.3 percent of a company's gross revenue for the year.

The Canadian cannabis industry has struggled mightily since the promise of a never-ending growth cycle dissipated into an expensive reality. Stakeholders have raised their voices to argue against what they believe is an unjust landscape when it comes to operating fees, but have seen little success so far.

These financial struggles have led operators to significantly downsize their businesses and ambitions outside of Canada.

Cannabis company news

• Clever Leaves Holdings (NASDAQ:CLVR)closed a sale for international assets, including its EU-GMP-certified cannabis processing facility in Portugal. The purchase by an affiliate of Curaleaf Holdings totaled 2.5 million euros.

• Entourage Health (TSXV:ENTG,OTCQX:ETRGF)completed a shipment of 100 kilograms of bulk medical cannabis to the Australian market.

• Organigram Holdings (NASDAQ:OGI,TSX:OGI)completed a consolidation of its issued and outstanding common shares. The ratio of the consolidation is four to one.

• TerrAscend (TSX:TSND,OTCQX:TSNDF)changed its OTC Markets symbol to "TSNDF" from "TRSSF."