Toronto-based Cronos Group Inc. (NASDAQ: CRON) plans to significantly expand its cultivation capabilities through its joint venture, Cronos Growing Company.
Cronos will provide a $51 million secured credit facility to GrowCo to fund the expansion of its cannabis facility in Leamington, Ontario. The move aims to meet rising global demand for high-quality cannabis flower, the company said Thursday.
Key points of the expansion include:
- Cronos will have the option to purchase up to 70% of GrowCo’s expanded production.
- The company will appoint three out of five GrowCo board members starting July 1.
- Operations at the expanded facility are expected to begin in the second half of 2025.
Cronos Chairman and CEO Mike Gorenstein said the investment will support the company’s expansion in current markets and potential growth into new ones.
“At the onset of cannabis legalization, we deliberately chose not to overbuild our facilities, focusing instead on quality and meeting consumer needs first and scaling later,” Gorenstein said in a statement. “With the Spinach brand achieving the number one flower brand in Canada, strong international demand for Peace Naturals, and GrowCo’s proven track record of success – now is the right time to expand. … This investment sets us up well to meet the increasing demand and seize the right opportunities as they arise.”
Cronos currently operates in Canada, Australia, Germany, Israel, and the United Kingdom. The company reported that in 2023, it purchased approximately $21 million of biomass from GrowCo, while GrowCo sold material worth roughly $20 million to third parties.
The expansion is subject to obtaining relevant building permits and regulatory approvals.
The post Cronos Group expands GrowCo cannabis joint venture appeared first on Green Market Report.
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