Investors' love affair with the legal weed intensified yesterday after another industry takeover.
Toronto-based Cronos Group announced that it was forming a partnership with Boston-based Ginkgo Bioworks in a share swap valued at $122 million, provided Ginkgo achieves "certain production milestones".
The share price of Cronos is $16.77 as of this writing, up from its Friday close of $12.81. Its market capitalization is $2.83 billion.
Another Canadian cannabis company, Nanaimo-based Tilray, is trading at US$81.75 as of this writing. It went public in July on NASDAQ at US$17, and its market capitalization has risen to US$7.65 billion.
Canada's largest publicly traded cannabis company, Canopy Growth Corporation, has fallen off slightly this morning to $67.38 as of this writing. That's still up significantly from its Friday close of $59.64, thanks to a 14.6 percent increase yesterday.
Canopy Growth's market capitalization is a whopping $15 billion.
Bloomberg has reported that there's no sign of pot stocks losing their lustre, despite efforts by short sellers to drive down the price and pocket huge profits.
Cronos Group's recent deal with Ginkgo will enable it to produce cultured cannabinoids.
“The potential uses of cannabinoids are vast, but the key to successfully bringing cannabinoid-based products to market is in creating reliable, consistent, and scalable production of a full spectrum of cannabinoids, not just THC and CBD," Cronos Group CEO Mike Gorenstein said in a news release. "We are thrilled to partner with Ginkgo; their biological engineering capabilities and disruptive technology platform are unrivaled. Together we can revolutionize the cannabis industry.”
Ginkgo has been "designing microorganisms for the production of cultured products across pharmaceuticals, agriculture, flavours, fragrances, and more" for over 10 years, the two companies said in a news release.
Cronos Group bills itself as a vertically integrated cannabis company, and its assets include a 2,000-square-foot pilot facility in the Okanagan Valley as well as the medicinal cannabis company Peace Naturals.
It's also part of a joint venture with Israel-based Kibbutz Gan Shmuel that's producing medicinal cannabis
In addition, Cronos Group has an exclusive supply agreement with the German pharmaceutical company Pohl-Boskamp. And Cronos Group is involved in a joint venture in Australia with NewSouthern Capital Pty Ltd. and is part owner of Whistler Medical Marijuana Company.
Earlier this year, Cronos Group became the first Canadian company to be listed on a U.S. stock exchange when it was accepted onto NASDAQ.