Weekly Performance Report

7-21-25 → 7-25-25

Noticeable activities over the last week:

Bought: CRON

Why did I buy Cronos?

The same reason everybody buys Cronos.

First off, it’s interesting to note that CRON has an 8-month basing formation inverse head-and-shoulders pattern. It also created a double-bottom post Liberation day.

Other than that, here is a brief meta-overview as to the reasons people give for buying Cronos.

Undervalued with Strong Balance Sheet: CRON trades at a discount to its cash pile, with practically no debt and a negative enterprise value. This "Ben Graham cheap" valuation offers a perceived margin of safety and downside protection, appealing to value investors dipping their toe in the cannabis space.

Revenue Growth: CRON is showing improving top-line growth, with Q1 2025 revenue up 28% YoY and full-year 2024 up 35% YoY. They’re also participating in international markets (e.g., Israel, Germany, UK).

Improving Financial Metrics: Gross margins have risen significantly (43-44% in Q1 2025 from 18% in Q1 2024), with positive free cash flow for FY ‘24.

Market-Leading Brands: Spinach is in the top 5 Canadian cannabis brands. Of course, I’m supposed to provide you with a subset of a subset of a market to make it sound all the more impressive: Peace Naturals holds #1 in Israel’s medical market. Lord Jones leads in hash-infused pre-rolls. And then I’m supposed to tell you what it means: this showcases their brand strength and consumer loyalty.

Strategic Turnaround and Growth Initiatives: I’m supposed to mention and attribute recent developments to the CEO Mike Gorenstein while ignoring earlier fumbles or by implicitly alluding to those fumbles in a positive light: CRON has exited low-margin U.S. hemp CBD, and invested in GrowCo (50% ownership) to boost supply capacity. International expansion (Germany, UK, Australia, Switzerland). I’m then supposed to use words like strategic and forward looking, along with phrases such as, “building a global juggernaut”.

Altria’s Backing: Being backed by Big Tobacco is supposed to speak for itself, so I’ll let it do that.

Industry Catalysts: Potential Canadian excise tax reform (e.g., 10% flat rate) could save CRON $5.4M annually, boosting margins. Industry consolidation due to insolvencies and regulatory pressures favors CRON’s strong financial position. U.S. legalization remains a long-term growth driver.

Share Buyback Program: A $50M share repurchase program (5-7% of market cap).

So there you have it. That’s pretty much the consolidated bull case.

Switching topics and as a final note, St. Joe Co has recently engaged in a conference call (the first in a long time). I’ve not listened/read it yet, but in case you didn’t know, now you do.

I ended the week up 1.87%.