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

We came across a bullish thesis on Cronos Group Inc. on Stock Pursuit’s Substack. In this article, we will summarize the bulls’ thesis on CRON. Cronos Group Inc.’s share was trading at $2.5900 as of January 29th. CRON’s trailing P/E was 23.55 according to Yahoo Finance.

Cronos Group Inc., a cannabinoid company, engages in the cultivation, production, distribution, and marketing of cannabis products in Canada, Israel, and internationally. Recent news surrounding renewed White House interest in rescheduling marijuana has driven Cronos Group (CRON) shares to multi-year highs, reinforcing the bullish thesis around the company’s long-term positioning.

Reports from Reuters and the Washington Post indicate plans to reclassify marijuana as a Schedule III substance, a shift that would meaningfully reduce regulatory and tax burdens across the U.S. cannabis industry. Since the initial write-up, Cronos Group (CRON) stock has rallied roughly 67%, outperforming peers and cannabis ETFs such as MSOS, as investors price in improved fundamentals and optionality tied to U.S. market access.

A Schedule III classification would eliminate the punitive IRS Section 280E restrictions, allowing cannabis operators to deduct normal operating expenses and access standard tax credits, materially improving cash flow and profitability potential. This regulatory change is particularly significant for Cronos Group (CRON), which is uniquely positioned through its strategic backing from Altria Group and its existing U.S. exposure via PharmaCann. Cronos currently operates PharmaCann and holds an option to acquire a 10.5% stake, with PharmaCann owning 51 dispensaries across multiple U.S. states, giving Cronos a foothold ahead of broader federal legalization.

Management has consistently articulated that Canada serves as a pilot market, with the U.S. and Europe representing the true long-term growth opportunities once regulation permits expansion. CEO Mike Gorenstein has repeatedly emphasized readiness to act aggressively as the regulatory landscape evolves, a strategy reinforced by Altria’s influence at the board level and Cronos’ substantial cash reserves.

Beyond commercial benefits, rescheduling could also accelerate medical research and FDA-approved cannabis applications by lowering research barriers. Taken together, improving regulatory momentum, tax normalization, strategic U.S. optionality, and disciplined long-term planning support the case for Cronos Group (CRON) as a compelling long-term investment despite recent share price gains.

Previously we covered a bullish thesis on Cronos Group Inc. (CRON) by Jake LaMotta in September 2024, which highlighted strong revenue growth, margin improvement, a substantial cash balance, and valuation upside versus peers. The company’s stock price has appreciated approximately by 14.60% since our coverage. This is because improving fundamentals supported sentiment. The thesis still stands as balance sheet strength remains. Stock Pursuit shares a similar thesis but emphasizes U.S. regulatory rescheduling and tax relief.

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Disclosure: None.