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Altria Offers Cronos Group A Light

Daniel Chase

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The marijuana industry, in the past several years, has become a tour de force in the global marketplace. With Canada becoming the first G7 nation to legalize the recreational use of cannabis, around the world, other countries have been putting in long hours at the plant to catch up in terms of drafting and enacting cannabis legislation. As marijuana has garnered popular opinion from sectors that historically were opposed to the substance, such as doctors and other experts from the medical sphere, companies from other industries have emerged from the woodwork, hungry to invest in cannabis. Recent statistics indicate that the total demand for marijuana in the United States, including both legal and black market sales, is estimated at $52.5 billion, according to information gathered by Forbes. 

Several months ago, the cannabis industry, budding with excitement from Canada’s legislation, piqued the interest of several large tobacco companies, notably Altria (MO), the tobacco manufacturer responsible for producing Marlboro brand products. Recently, domestic cigarette sales have been declining, most likely due to the advent of e-cigarettes, vapes, and rising popularity, and access, of marijuana. Altria (MO) recognized that the name of the game was no longer cigarettes, but rather finding a way to capitalize on the lucrative marijuana industry gaining tread in the United States. 

Tapping into the potential boundlessness of success taking place in the Canadian cannabis market, Altria Group (MO) announced on Friday that, after weeks of speculation, it would buy a 45% stake in Cronos Group (CRON), one of the largest producers of cannabis in Canada, for approximately $1.8 billion. Howard Willard, Altria’s (MO) chief executive lauded his company’s investment as “an exciting growth opportunity in the emerging global cannabis” market. This investment not only indicates a tidal shift in corporate perspective on cannabis after nearly a century of prohibition but moreover, this represents a fear felt by big tobacco that their industry is slowly but surely losing its predominance. 

Cronos (CRON), as a key producer of cannabis for the Canadian market, produces roughly 258,000 pounds of marijuana per year. Although they have an extremely high rate of production, in the past few months, the company has expressed concerns with excess inventory, a roadblock that will undoubtedly be overcome with the support of Altria’s (MO)  global distribution capabilities. 

“Altria is the idea partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth. The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers. Importantly, Altria shares our vision of driving long-term value through innovation, and we look forward to continuing to differentiate in this area…”

Mike Gorenstein, Chairman/President & Chief Executive Officer, Cronos Group 

Altria (MO) is not the first industry-leading company to invest outside of the traditional scope by bringing cannabis into the fold. Several months ago, Constellation Brands (STZ), the parent company of alcoholic beverage brands such as Corona, Modelo, Pacifico, Robert Mondavi, and others, announced a significant expansion of their strategic partnership with Canopy Growth, one of the world’s leading cannabis producers. Given Constellation’s (STZ) reputation in the alcoholic beverage industry, their investment in Canopy was predicated on the possibility of developing and distributing cannabis-infused beverages for the global marketplace. 

At the time of the investment, Constellation Brand’s CEO Rob Sands gave a statement on his thoughts about the deal:

“Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space.”

Rob Sand, Chief Executive Officer, Constellation Brands 

Circling back to the Altria (MO) deal, while investing in Cronos (CRON) is an interesting direction and will undoubtedly attract investor attention, the fact of the matter is that the tobacco industry has quite a bad rep. Cannabis has only recently been accepted by public investors as an industry/product worth investing in. This acceptance has come from extensive research done by medical experts to prove cannabis’ medicinal qualities. 

Perhaps Cronos Group’s (CRON) partnership with Altria (MO), a company synonymous with a product that is less than healthy for its consumers, may end up besmirching the good name that cannabis producers and retailers have worked so hard to cultivate. 

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Energy

Where Will Oil Go After This Week’s Price Hit?

Jon Phillip

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Even though oil had been taking a beating over the last 2 trading sessions, its price rose to $69 per barrel on Friday. However, oil prices are experiencing the worst week of 2019 mainly due to potential economic slowdown and ever-growing oil inventories. US oil inventories have not been this high since July of 2017. And to top it all off, the trade war between the US and China is growing wearier every day further affecting oil prices.

Naeem Aslam, the chief market analyst at TF Global Markets, stated, “Clearly, bargain hunters are back in town.” He later added, “However, it is still set to record the worst week of the year and this is due to the increase in trade war tensions between the U.S. and China.”

Global Scale

The global benchmark for oil, Brent Crude, has experienced a decrease of 5 percent this week. However, Brent Crude this morning climbed $0.98 to value each barrel at $68.74. Due to US sanctions and voluntary supply cuts, a floor under prices held. Market analysts are expecting the oil market to recover off of the price floor.

“It is reasonable to doubt whether Saudi Arabia will be willing to step up its output given the latest decline in prices, […] we therefore expect to see higher oil prices again in the near future,” Explain analysts at Commerzbank.

In order to make the market tighter, the Organization of the Petroleum Exporting Countries has been cutting oil supplies since the beginning of the year. 

Brent Crude’s prices reflect that the supply and demand of oil is tightly knit. According to UBS, Brent Crude should get back to $75 this month as supply gets tighter and tighter.

“Compliance of OPEC and its allies to the production cut deal remains high, while production from Iran and Venezuela is likely to again trend lower this month,” explains analyst Giovanni Staunovo,

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StockPrice.com Friday Morning Update – May 24, 2019

Joe Samuel

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New Systems & AI Trigger Innovation In Security Industry; Can Lockheed Martin Adapt?

Threats to people’s lives are constantly developing across the globe. In order to mitigate the growing fears of international conflict, security and defense companies have continuously innovated. Living in constant fear is never sought and these companies understand that. Security innovations allow people in the US to walk around freely at the park or go watch their favorite artist at a concert with little to no fear.

New Potential for the Security Industry & Security Stocks – Click Here


Two Massive Growth Industries, One Choice for Investors

Two of the fastest growing industries right now in the United States are on-demand technology and cannabis. These two industries are at the epicenter of growth and investors aren’t being shy about their appetite for companies in these arenas. But one company, in particular, has developed a unique business model that services both of these massive growth industries.

Click Here For More Information


The Delivery Market in the Age of Convenience; Can GrubHub & Uber Adapt?

As the internet grows and develops, people and services become more connected. Thus, the food delivery service industry has blown up over recent years. Big players like UberEats (UBER), Postmates, and DoorDash are making big splashes against competitors like GrubHub (GRUB). These companies only represent a fraction of what delivery services can become.

Will This Be The Future For Delivery Stocks As We Know It? Click Here

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New Systems & AI Trigger Innovation In Security Industry; Can Lockheed Martin Adapt?

Joe Samuel

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Threats to people’s lives are constantly developing across the globe. In order to mitigate the growing fears of international conflict, security and defense companies have continuously innovated.

Living in constant fear is never sought and these companies understand that. Security innovations allow people in the US to walk around freely at the park or go watch their favorite artist at a concert with little to no fear.

New Potential for the Security Industry & Security Stocks

While developing security protocols and machines to fight threats overseas is important, home-grown threats have become a point of concern for US citizens. Mass shootings have increased, and the Muslim radicalization of American citizens is prevalent as ever. In order to make people safer, Liberty Defense has come to fill that hole.

Liberty Defense Holdings Ltd. (SCAN.V) is developing HEXWAVE to revolutionize how facilities get secured. HEXWAVE can be used to detect any kind of weapon through 3D imaging. The technology utilizes both quickness and indiscretion to produce warnings of potential threats while respecting people’s privacy. 

While the product is still undergoing testing, Liberty Defense Holdings Ltd. (SCAN.V) has been taking steps to put HEXWAVE in front of the public. The company recently announced signing a memorandum of understanding with Utah’s Attorney General to beta test HEXWAVE there. The technology can be tested at sporting events, amusement parks, schools, and government buildings.

Bill Riker, Liberty Defense’s CEO, stated, “HEXWAVE can be applied in a variety of settings to provide a means to identify possible threats before they advance into attacks. We are excited that the Attorney General of Utah recognizes the potential value of this technology and the opportunity it provides for enhanced security in the state.”

What’s Should Be Expected Of Defense Companies?

When people think about the US armed forces they marvel at the gear used from tanks to jet planes. Most people do not take the moment to think where the US actually gets its arms from.

Report: This New Technology Could Transform A Multi-Billion-Dollar Industry!

One company responsible for US defenses is Lockheed Martin (LMT). Lockheed Martin develops and manufactures missile systems, aircraft, and training systems. They even provide cybersecurity services to governmental figures.

While Lockheed Martin controls a large portion of the defense industry, they show no signs of slowing down. Recently, the company made progress on its new production facility in Alabama. It is expected to be a 225,000 square foot facility to fulfill US Air Force needs.

The construction is expected to be finished in 2021. Executive Vice President, Frank St. John, explained, “All our employees come to work with an unwavering commitment to help our customers succeed in their mission to create a more secure and prosperous world.”


security defense stock
Disclaimer: Pursuant to an agreement between MIDAM VENTURES, LLC and Liberty Defense Holdings Inc. Midam was hired for a period from 04/15/2018 – 5/15/2019 to publicly disseminate information about Liberty Defense Holdings Inc. including on the Website and other media including Facebook and Twitter now extended through June 21, 2019. We were paid $350,000 (CASH) for & were paid “0” shares of restricted common shares. We may buy or sell additional shares of Liberty Defense Holdings Inc. in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information. FULL DISCLAIMER HERE




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