Cronos Group Enters Agreement to Acquire State-of-the-Art Fermentation and Manufacturing Facility
July 11 2019 - 7:30AM
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“
Cronos
Group” or the “
Company”) today announced
that it has entered into an agreement to acquire an 84,000 square
foot GMP compliant fermentation and manufacturing facility in
Winnipeg, Canada from Apotex Fermentation Inc.
(“
AFI”). The state-of-the-art facility, which will
operate as “Cronos Fermentation”, includes fully equipped
laboratories covering microbiology, organic and analytical
chemistry, quality control and method development as well as two
large scale microbial fermentation production areas with combined
production capacity of 102,000L, three downstream processing
plants, and bulk product and packaging capabilities.
As previously announced, Cronos Group has entered into a
partnership with Ginkgo Bioworks, Inc. (“Ginkgo”)
to produce cultured cannabinoids. Research and development under
this partnership is progressing, and as associated milestones are
hit, this new facility is expected to provide Cronos Group with the
ability to produce cultured cannabinoids at commercial scale with
high-quality and high-purity.
“This acquisition will provide the fermentation and
manufacturing capabilities we need to capitalize on the work
underway with Ginkgo once the milestones under that partnership are
achieved,” said Mike Gorenstein, CEO of Cronos Group. “Together
with Ginkgo, we are bringing innovation and the power of biological
manufacturing to the cannabis industry, aiming to allow for
cannabinoid production at large scale and with greater efficiency
than is currently possible with traditional cultivation and
extraction. We continue to be very excited about the opportunities
ahead.”
The acquisition is expected to close in the third quarter of
2019, subject to customary closing conditions. AFI is currently
overseeing a wind-down of the facility, which is expected to
continue through Fall 2019. During this time, Cronos Group
will also begin aligning specifications for the equipment and
manufacturing required for the production and downstream processing
of cannabinoids. To support this work, Cronos Group expects a team
of engineers, scientists, production and quality assurance
personnel currently working at the facility to join Cronos
Group.
Commercial production at the facility is subject to completion
of the equipment alignment for cannabinoid based production, the
receipt of the appropriate licenses from Health Canada for the
production of cultured cannabinoids under the Cannabis Act (Canada)
and the achievement of milestones under the Ginkgo partnership.
The Company intends to use existing cash on hand to fund the
acquisition, which is not expected to be material to Cronos Group’s
cash position.
About Cronos Group Inc.
Cronos Group is an innovative global cannabinoid company with
international production and distribution across five continents.
Cronos Group is committed to building disruptive intellectual
property by advancing cannabis research, technology and product
development. With a passion to responsibly elevate the consumer
experience, Cronos Group is building an iconic brand portfolio.
Cronos Group’s portfolio includes PEACE NATURALS™, a global health
and wellness platform, and two adult-use brands, COVE™ and
Spinach™. To learn more about Cronos Group and its brands, please
visit: www.thecronosgroup.com; www.peacenaturals.com;
www.covecannabis.ca; www.spinachcannabis.com.
Forward-Looking Statements:
This news release contains “forward-looking information” and
“forward-looking statements” within the meaning of applicable
Canadian and U.S. securities laws. All information contained herein
that is not clearly historical in nature may constitute
forward-looking information. In some cases, forward-looking
statements can be identified by words or phrases such as “may”,
“will”, “expect”, “plan”, “anticipate”, “intend”, “potential”,
“estimate”, “believe” or the negative of these terms, or other
similar expressions intended to identify forward-looking
statements. Some of the forward-looking statements contained in
this press release include: the completion of the acquisition and
timing thereof; the anticipated benefits of the acquisition and the
Company’s partnership with Ginkgo, including the ability to produce
cultured cannabinoids at a commercial scale and, if produced, the
quality and purity thereof and efficiency of such production; the
Company’s intentions with respect to the facility following closing
of the acquisition, including its ability to conduct commercial
production of cannabinoids at the facility and the timing thereof;
the receipt of required licenses; the Company’s ability to retain
employees currently employed at the facility; and the Company’s
intention to build an international iconic brand portfolio; and
develop disruptive intellectual property. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are
inherently subject to significant business, economic and
competitive risks, uncertainties and contingencies that may cause
actual financial results, performance or achievements to be
materially different from the estimated future results, performance
or achievements expressed or implied by those forward-looking
statements and the forward-looking statements are not guarantees of
future performance. A discussion of some of the material risks
applicable to the Company can be found in the Company’s current
Management’s Discussion and Analysis and Annual Information Form,
both of which have been filed on SEDAR and EDGAR and can be
accessed at www.sedar.com and www.sec.gov/edgar, respectively. The
forward-looking information included in this news release is made
as of the date of this news release and, except as required by law,
Cronos Group disclaims any obligation to update or revise any
forward-looking statements. Readers are cautioned not to put undue
reliance on these forward-looking statements.
Investor Relations Contact:Anna ShlimakTel:
(416) 504-0004investor.relations@thecronosgroup.com
Media Contact:Barrett Golden, Adam Pollack or
Mahmoud SiddigJoele Frank, Wilkinson Brimmer KatcherTel: (212)
355-4449
Cronos (NASDAQ:CRON)
Historical Stock Chart
From Aug 2024 to Sep 2024
Cronos (NASDAQ:CRON)
Historical Stock Chart
From Sep 2023 to Sep 2024