Cannabis giant Cronos Group gets a boost after saying it will buy a state-of-the-art fermentation and manufacturing facility
- Cronos Group, the Canadian cannabis company, announced Thursday a plan to acquire a manufacturing and fermentation facility in Winnipeg, Canada.
- Shares climbed more than 2% in early trading on the news.
- The announcement comes just a day after Cronos Group announced it had hired a Mondelez veteran to be its chief innovation officer.
- Watch shares of Cronos Group trade live.
Partnerships and acquisitions are the name of the game for large cannabis companies looking to grow quickly.
Shares of Cronos Group, a Canadian cannabis company, jumped more than 2% in early trading on Thursday after the company announced an agreement to purchase a state-of-the-art fermentation and manufacturing facility from Apotex Fermentation.
The facility is in Winnipeg, Canada and comes with fully equipped laboratories that cover microbiology, chemistry, quality control, and method development. It also has two large fermentation production areas, which will increase Cronos' ability to produce "cultured cannabinoids at commercial scale with high-quality and high-purity."
The new plant will be called Cronos Fermentation. It will help Cronos Group's partnership with Ginkgo Bioworks by providing the fermentation and manufacturing needed to capitalize on the agreement.
"Together with Ginkgo, we are bringing innovation and the power of biological manufacturing to the cannabis industry, aiming to allow for cannabinoid production at large scale and with greater efficiency than is currently possible with traditional cultivation and extraction," said Mike Gorenstein, CEO of Cronos Group in a statement. "We continue to be very excited about the opportunities ahead."
The announcement comes after Cronos Group announced that it had also appointed a new chief innovation officerto its staff. Dr. Todd Abraham joins the company after a career in traditional packaged foods at Mondelez International, Nabisco Foods Company, and The Pillsbury Company.
To grow quickly and scale up, cannabis companies have entered into many partnerships as of late. Cronos has a partnership with Altria Group, a large tobacco producer and marketer. Competitors also have partnered with companies such as Constellation Brands, which owns a majority stake of Canopy Growth, and Anheuser-Busch InBev, which has a joint venture with Tilray.
Shares of Cronos are up more than 40% year to date.