Cronos Group CRON is a globally diversified and vertically integrated cannabis company. The company has footprint in four continents.

Cronos operates two wholly-owned Canadian licensed producers regulated under Health Canada’s Access to Cannabis for Medical Purposes Regulations: Peace Naturals Project Inc., which was the first non-incumbent medical cannabis license granted by Health Canada, and Original BC Ltd., which is based in the Okanagan Valley, British Columbia.

The company sells dried cannabis and cannabis oils through wholesale and direct-to-consumer channels under its medical cannabis brand, PEACE NATURALSTM. Cronos has multiple international production and distribution platforms, including in Germany, Poland, Israel and Australia.

In October 2018, Canada became the first G7 country and the second country in the world to legalize cannabis sales for adult recreational use. This, in turn, should propel sales for Cronos and other companies like Tilray TLRY.

The company posted significant sales growth in the second quarter, driven by expansion in patient onboarding, increase in average sales price and continued strong growth in cannabis oil offering. We expect the momentum to continue in the third quarter as well.

In September 2018, Cronos and Aleafia Health Inc. initiated a joint medical cannabis study to improve the management and treatment of insomnia and daytime sleepiness. In August 2018, Cronos announced a supply agreement with Cura Cannabis Solutions, one of the largest cannabis companies in the world. Cura signed a five year take-or-pay supply agreement to purchase a minimum of 20,000 kilograms of cannabis per annum from Cronos GrowCo, as and when it receives production and sales licenses from Health Canada.

In June 2018, Cronos entered into a strategic distribution partnership with Delfarma Sp. Zo.o. Per the five-year exclusive distribution agreement, Cronos will supply PEACE NATURALS branded cannabis products to Delfarma for distribution within Poland.

Hence, investors will focus on pipeline progress and updates when Cronos reports third-quarter results.

Zacks Rank & Stocks to Consider

Cronos currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the healthcare sector are Gilead Sciences Inc. GILD and Bristol-Myers Squibb Co. BMY. Both sport a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’s earnings per share estimates increased from $6.58 to $6.87 for 2018 over the past 60 days. Estimates for 2019 are also up by 27 cents.