Cronos Group Inc. (TSXV:MJN) (OTC:PRMCF) announced this morning that its previously announced strategic joint venture, dubbed "Cronos Israel", with Kibbutz Gan Shmuel for the production, manufacture, and global distribution of medical marijuana, has been approved by the TSX Venture Exchange.
This announcement comes just weeks after Israel's agricultural ministry classified medical marijuana cultivation as farming, effectively granting cannabis cultivators a slew of government benefits and support.
According to the release, "Israel's climate, which is ideal for year-round greenhouse cultivation, coupled with Gan Shmuel's existing infrastructure and skilled labor force, will enable Cronos Israel to produce high quality medical cannabis at an expected cost of between $0.40 and $0.50 per gram."
Since Gan Shmuel is situated on 4,939 acres of mixed-use agricultural/industrial land, it provides Cronos Israel the ability to expand production capacity well beyond 100,000 kg per year to meet demand in Israel, Germany, and other future distribution channels.
If such a low cost-per-gram can be achieved, that would give Cronos Israel a substantial edge over other medical marijuana producers. For instance, Aurora Cannabis Inc. (TSX:ACB) (OTC:ACBFF) just reported financial results this morning, which noted cash production costs of $1.92 per gram.
Cronos Group's International Presence
Cronos' presence in Israel only adds to the company's strong international positioning. Cronos-owned licensed producers have already had a successful shipment of medical cannabis oil to the Cayman Islands, and beyond that, the company recently entered into a strategic distribution partnership with G. Pohl-Boskamp GmbH & Co. KG to supply Peace Naturals branded cannabis products to Pohl-Boskamp for distribution within Germany.
In addition to the announcement regarding Cronos Israel, the company also made some noteworthy leadership changes.
Ms. Xiuming Shum joins Cronos as General Counsel with eight years of transactional and in-house experience in mergers and acquisitions and regulatory change management.
Mr. Kevin Gifford joins Cronos as Vice President of Finance and Corporate Development with over 15 years of experience in both operating and investing in companies across multiple industries, including consumer products, business services, retail and technology.
Mr. Ran Gorelik joins Cronos as General Manager of Cronos Israel with over 20 years of entrepreneurial and operational experience in biotech and healthcare.
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