Why Cronos’s Listing in Australia Is Important

Nivedha Elango - Author

Nov. 11 2019, Published 1:30 p.m. ET

Cronos Australia (CAU.AX) was recently listed on the Australian Stock Exchange (or ASX) under the ticker CAU. The company takes care of Cronos Group’s (CRON) operations in Australia. Further, the company recently raised 20 million Australian dollars in its IPO. Notably, the funds from this IPO are earmarked for developing and marketing a new line of medical cannabis products.

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Cronos in Australia

Cronos Australia was formed by Cronos Group and NewSouthern Capital. The company aims to become a leader in the Asia-Pacific health and wellness industry. After the Cronos Australia IPO, Cronos Group plans to hold 31% ownership in the company. NewSouthern Capital also plans to hold 31% ownership. Further, Cronos Australia expects to use certain elements of Cronos Group’s research and property.

Shane Tanner, Chairman of Cronos Australia, said, “The ASX listing is a significant milestone in the life of Cronos Australia, and we look forward to delivering on our vision of being a leading health and wellness company in the Asia-Pacific Region through a portfolio of successful, premium cannabinoid brands and products.”

Cronos Australia expects to import and sell medical cannabis products. The company plans to import from its home brand platform Peace Naturals. Plus, it plans to develop its own brand to market its products. With this new brand, the company would enter new markets such as New Zealand and the other Asia-Pacific regions.

Plus, the company plans to outsource to other domestic or international companies. As the regulations keep changing, the company works with its team in Hong Kong to develop its business plan to remain legally compliant.

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Cronos’s stock performance

Recently, Cronos Australia offered 40 million shares at 0.50 Australian dollars for its IPO. Notably, this implies indicative market capital of 64.4 million Australian dollars.

Cronos opened on Thursday at 0.355 Australian dollars, which is 29% less than the IPO price of 0.50 Australian dollars. The stock hit a high of 0.410 Australian dollars and a low of 0.34 Australian dollars on its first day of trading. The stock closed at 0.36 Australian dollars on Friday, implying a 5.44% gain from the first day of trading.

Other Australian pot stocks

The market capitalization of the top 20 listed cannabis companies in Australia totals 1.8 billion Australian dollars. However, the majority of this market cap comes from just three companies—Elixinol Global, Cann Group, and Althea.

Like most of its global peers, cannabis producer Elixinol’s (EXL.AX) stock value is showing a downward trend. On Friday, the stock fell to its 52-week low of 1.46 Australian dollars.

Cann Group (CAN.AX) stock is currently trading at 1.065 Australian dollars. The company’s stock fell by almost 63% from its value at the same time last year. Recently, the company’s stock fell by 23% after it reported its quarterly results. Althea Group’s (AGH.AX) stock is currently trading at 0.42 Australian dollars, gaining 71% year-to-date.


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