Buy the big momentum or buy the big pullback? That’s one question you might ask when it comes to deciding between Cronos Group (NASDAQ:CRON) and Scotts Miracle-Gro (NYSE:SMG). Shares of Cronos are up more than 45% so far in 2018, while Scotts stock has plunged around 40% year to date.
Another question you might ask is whether to invest in a pure-play marijuana stock (Cronos) or a top supplier to marijuana growers with extensive operations in addition to its cannabis focus (Scotts). But the best way to determine which of these two marijuana stocks is the better pick is to look at their future prospects. Here’s how Cronos Group and Scotts Miracle-Gro compare…
The case for Cronos Group
Cronos Group’s prospects should be very good over the long run. The Canadian recreational marijuana market is just getting started. The country’s total cannabis market should grow to around $5.5 billion by 2022, according to projections from Arcview Market Research and BDS Analytics.
European opportunities for Cronos look even more promising. The company already has a supply deal in Germany, which is likely to be the fastest-growing marijuana market in the world over the next four years. Cronos also has a supply agreement in Poland.
And there are even more international growth drivers for Cronos Group. The marijuana producer has joint ventures in Australia, Israel, and Latin America.
The key thing for investors to know about Cronos Group, though, is that it arguably ranks in the top two Canadian marijuana producers best-positioned to expand internationally. That’s because Cronos recently announced the second-largest investment from a major company outside of the cannabis industry. Earlier this month, tobacco giant Altria (NYSE:MO) picked Cronos Group as its cannabis partner, buying 45% of the company for around $1.8 billion.
This deal gives Cronos Group a nice amount of cash to use in increasing its global footprint, something the company’s CEO, Mike Gorenstein, said that it’s eager to do. Cronos also now has…
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