Cronos Group Inc (OTCMKTS:PRMCF) Just Ventured Into Australia

The share price of Cronos Group Inc (OTCMKTS:PRMCF), much like that of its competitors, has been declining over the recent past. The decline which began in early January 2018 has had a significant impact on the market capitalization of the stock which, prior to this, had a market capitalization of about $1.7 billion.This figure sounds quite optimistic presently as the market capitalization has halved and currently stands at $889.1 million, the latter being as a result of the bear run the company has experienced in the recent past.Readers can view this run in the chart below: PRMCF Daily ChartHowever, the company recently has made a move that might be its saving grace.Over a 23-hour period, the market, while reacting to this move, has caused the share price to surge. During this period, the price rose from $4.75, one of its lowest prices since December 2017, to highs of $6.76, a 42.3% increase in the share price. The above was reflective of the market’s high and positive expectations of the company’s future gains courtesy of the information is brought to the market. However, the price fell back to $5.9 later in the day and has stabilized at this price since.The price action can be seen in the chart below: PRMCF Daily ChartGiven the volatility associated with the stock, the relative movement of its price is difficult to determine. However, its long-term movement will be based on the company’s strategic outlook and the operational processes in place to get here. This piece will go deeper into this in a bid to determine the expected future price of the company’s share.Cronos Group: History and NowCronos Group Inc was formed back in 2013 as PharmaCan Capital Corp and headquartered in Toronto, Canada.The company acts as a principal investor – a firm which invests either equity (mostly) or debt in other firms within a specific industry of their choice – within the cannabis industry in Canada. Their preference is in firms which are either licensed or seeking licenses for the production of medical marijuana. They primarily make minority investments in these companies but with a caveat, they require certain governance – such as board representation – and shareholder rights.Over time, the firm has grown its wings within the cannabis sector and become a force. This explains the high valuation the market has accorded the company so far as well as its high sensitivity to the changes within the cannabis industry. Due to this, the company has been rising consistently and is expected to keep rising with every high a cannabis company makes.Recent DevelopmentsAs has been the custom with cannabis companies across Canada, Cronos Group Inc has decided to sell some of their shares to investors in a bid to raise funding to finance the coming periods.Through a bought deal financing option, the company sold over 5.25 million shares at a price of $8.75 per share, grossing at about $46 million.Cronos Group remains optimistic of a rise in the cannabis industry. This is especially so for Canada which is expected to federally legalize it in July this year. As such, the additional funding is expected to be the company’s saving grace as they dive into a period of prosperity for the Canadian cannabis market.These funds are expected to boost their working capital base as well as expand their production capacity – for their subsidiaries – and their research base. Going forward, the company expects to capitalize on the industry’s growth and invest in more cannabis companies – courtesy of the stronger financial base – as they work towards growing both geographically and integrating vertically.Venture into AustraliaOn the more recent news, the company has recently decided to venture into Australia.Through a press release which was made on 5^th February, the company’s management stipulated that they, together with NewSouthern Capital Pty Ltd – their joint venture partner – had launched Cronos Australia Pty Ltd.Through this joint venture, Cronos Group expects to venture into the southern Pacific regions including Australia, New Zealand, and South East Asia as they embark on their strategy: geographical expansion. Currently, Australia is a new gate into this region and is one of the countries that support the use of cannabis for medical purposes. The Australian legal cannabis market has been valued at $78 million and is expected to grow over time; PRMCF saw this and decided to capitalize on it.As such, it goes without saying that their CEO, Mike Gorenstein was quite supportive of this move. He was quoted during the launch stating:

"The launch of Cronos Australia as our newest international hub marks an important milestone for the Company. Cronos is focused on providing pharmaceutical grade medicine to patients in need, and we are excited that our Australian team shares this vision and commitment."

Source:The above remarks coupled with the high valuation point to a growing industry and an even faster-growing company. With the strategic outlook exhibited by the management of PRMCF, their growth is imminent.ConclusionPRMCF has ventured into a new market and is actualizing its geographical expansion strategy. Their trend remains quite strong and so does their outlook. If their strategy is properly actualized, the company is on a rising path and will be unstoppable. We remain bullish about their stock price.We will be updating our subscribers as soon as we know more. For the latest updates on PRMCF, sign up below!Disclosure: We have no position in PRMCF and have not been compensated for this article.Image courtesy of PAk Dock via Flickr