In today's episode of "Something Smells Funny in Big Cannabis," we learn that Cronos paid $300 million for a small CBD company (a takeover price of up to 150 times its 2018 revenue!), while Cronos' CEO’s private-equity firm stands to collect $120 million of it, including more than $20 million in fees.
When asked about this stunning revelation, Cronos spokesman Shlimak told MarketWatch that “the multiple Cronos Group paid is consistent with similar transactions that have been announced in our space and aligned with relevant publicly traded cannabinoid/CBD peers.”
Apparently the whole thing is just fine and dandy because they disclosed it, and because other cannabis PubCos have done similar things. Move along. Nothing to see here.
I predict that forensic accountants are going to have a field-day unpacking and deciphering the many insider-deals buried in many of the "biggest" cannabis transactions of the past few years.
The cannabis industry is being badly exploited.
The fastest way to stop this merry-go-round of craziness is to finally legalize cannabis on the Federal-level and make it a free-market system in which (virtually) anyone can participate as long as they abide by the rules, allowing the market to begin correcting itself, ousting the bad, promoting the good.
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