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Cronos Group Inc., one of many high-flying cannabis stocks, lost nearly 30 per cent of its value on Thursday after becoming the latest target of U.S. short-seller Andrew Left of Citron Research.

Mr. Left said Cronos has failed to say just how large its provincial distribution agreements are, as opposed to competitors such as Canopy Growth Corp. and Tilray Canada Ltd., which quantified deals with British Columbia and Quebec in news releases earlier this year.

Mr. Left cited unnamed sources who said Cronos’s “agreements are so small they could never justify the premium investors are paying for the stock.”

The company had not offered a response to Mr. Left at press time.

Mr. Left was an early voice criticizing Valeant Pharmaceuticals Inc. and has received credit for identifying issues that wounded the company, now known as Bausch Health Cos. Inc. He’s also attacked e-commerce software provider Shopify Inc. in a short that so far has been unsuccessful.

On the “buy” side, Mr. Left has been bullish on Cronos competitor Tilray Inc., which led one analyst firm covering Cronos to suggest Thursday that that was part of Mr. Left’s motivation in publishing the report.

PI Financial Corp. Managing Director Jeremiah Katz told clients Thursday “We felt the report was light on meaningful content and had numerous red herrings.”

Mr. Katz passed along a report from the firm’s Jason Zandberg that said most medical-cannabis producers have not disclosed contracted supply amounts, “and even if they did we believe these are not relevant. … We believe that Cronos has been more conservative by not announcing details whereas some producers have used the term ‘allocated supply’ to suggest larger potential shipments [than] may actually be delivered.”

Cronos has announced a five-year, 20,000-kilogram-a-year supply agreement with Cura Select Canada, “which makes it among the largest announcements to date,”Mr. Zandberg said.

Mr. Left’s wide-ranging report also critiques Cronos’s sales levels, a small withdrawal of product in Germany under a subsidiary’s previous management and a lack of research and development spending. Ultimately, he argues, “retail investors have piled into Cronos in the hope that Diageo will announce an investment or alliance relating to cannabis-infused beverages. As a result, Cronos is now trading almost in-line with Canopy Growth based on market cap … the market is already pricing in that Cronos gets the coveted ‘beverage deal.’”

Cronos shares nearly doubled in the trading sessions between Aug. 17 and Monday, largely because of that speculation.

That was more true at $16.37, Wednesday’s close, versus Thursday’s $11.77. While Mr. Left has a $3.50 target price, however, Mr. Zandberg said the sell-off is “unjustified” and “investors should buy on weakness.”

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