Cronos Group Inc. (CRON): A Bull Case Theory

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We came across a bullish thesis on Cronos Group Inc. on LongTermValue Research’s . In this article, we will summarize the bulls’ thesis on CRON. Cronos Group Inc.’s share was trading at $2.01 as of July 16^th. CRON’s trailing P/E was 14.36 according to Yahoo Finance.

A close up of cannabis plants growing in an outdoor facility, symbolizing the product of the cannabinoid company.

Cronos Group (CRON) presents a rare deep value opportunity for investors seeking shelter in assets trading below net cash amidst ongoing market volatility and geopolitical tension. With a market cap of $722 million and an enterprise value of negative $70 million, CRON is a true net-net—trading below its adjusted burn-down book value of $807 million.

The company holds approximately $840 million in cash, exceeding its market capitalization, and recently announced a $50 million buyback (7% of market cap), signaling confidence in its intrinsic value. Investor fatigue is high due to past value destruction, but the underlying fundamentals suggest a turnaround is underway.

CRON holds a leading 20% share in Canada’s cannabis gummy market with its Spinach brand and reported 28% YoY revenue growth and 7% EBITDA margins in Q1 2025. Gross margins expanded to 44% from 18% YoY, and the company is now free cash flow positive—unusual for a net-net. Valuation scenarios suggest substantial upside.

Using a base-case FCF power of $45.6 million and a 10x multiple, the operating company is worth $1.18 per share, which, when added to the adjusted book value of $2.09, implies a $3.28 per share valuation—75% above the current price. Additionally, Altria’s 40% ownership offers a strategic call option.

A buyout of the remaining 60% at 10x EBITDA could imply a takeout price of $3.86 or more, with multibagger potential if CRON achieves $50 million EBITDA by 2026. With positive momentum, ample cash, and potential strategic catalysts, CRON stands out as a high-upside, low-downside net-net anomaly.

Previously we covered a bullish thesis on Cronos Group Inc. (CRON) by Jake LaMotta in February 2025, which highlighted the company’s strong balance sheet, leading cannabis brand, and undervaluation. The company’s stock price has appreciated approximately by 8% since our coverage. This is because operational improvement played out. LongTermValue Research shares a similar view but emphasizes turnaround momentum and Altria buyout optionality.

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Disclosure: None.