Worried About the Vaping Controversy? Relax and Buy CRON Stock

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After a long and challenging summer for cannabis-sector stockholders, investors were hoping for a recovery in Cronos Group (NASDAQ:CRON) stock. Then the bombshell news struck: on Sept. 11, the current presidential administration announced plans to ban flavored e-cigarettes in the wake of a lung-disease outbreak and at least six deaths.

Worried about the Vaping Controversy? Relax and Buy CRON Stock
Worried about the Vaping Controversy? Relax and Buy CRON Stock

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With vaping being an integral part of the cannabis and CBD market, the legalized cannabis sector suffered and Cronos stock was no exception.

That begs the question of whether holders of CRON stock should panic-sell or take advantage of what could be an opportunity to buy low and, hopefully, sell at a higher price later.

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Assessing the Damage to CRON Stock

It only took a few trading days for Cronos Group stock to slide from $11.60 (I’ll be referring to the American version of the stock here) on Sept. 11 to slightly more than $10 per share. That’s pretty extensive damage to CRON stock, especially considering that there wasn’t been any particularly negative or damaging company-specific news during that time.

As I see it, this is simply overreactive, fear-based selling due to the vaping crackdown. InvestorPlace’s Josh Enomoto summed up my sentiment on the situation quite nicely:

In the nearer term, shares might be more volatile than usual. However, in the long run, I don’t see this impacting the company… It will take time for this issue to cool down. But once it does, CRON stock can get back to its business of growing cannabis in a fiscally sustainable manner.

No one is claiming that Cronos Group stock will immediately climb back to its all-time high, and the CRON stock price is likely to wobble and chop around as the vaping issue plays out in the media and the investing community. My thesis, really, is that the entire cannabis sector will stage a comeback and investors will remember what they shouldn’t have forgotten in the first place: CRON is one of the biggest and most respected companies in the cannabis industry.

This, Too, Shall Pass

For the time being, the current presidential administration is ultra-aggressive in its stance towards flavored e-cigarettes, with U.S. Health and Human Services Secretary Alex Azar declaring the administration’s intention to “clear the market of flavored e-cigarettes” to protect “children, families, schools and communities.”

The next thing you know, flavored e-cigarettes were being outlawed in San Francisco, Michigan, and Boulder, Colorado; Ray Lopez, the alderman of Chicago’s 15th ward, garnered some publicity for himself when he introduced an ordinance that would ban vaping products — all of them, not just the flavored variety — throughout Chicago.