Marijuana Stocks Fall As Short Seller Says Pot Play Is ‘All Talk’
BILL PETERS, 30 August 2018
Marijuana stocks retreated Thursday after short seller Citron Research alleged that Canadian cannabis producer Cronos Group (CRON) was “all talk” and was omitting key details about the size of its distribution agreements. The company, Citron Research alleged in a report Thursday, “appears to have been deceiving the investing public by purposely not disclosing the size of its distribution agreements with provinces — unlike every other major cannabis player.”
“Our sources have informed us that it’s because the agreements are so small they could never justify the premium investors are paying for the stock,” Citron Research said. Cronos said it could not comment on the report. The company said its advisers had done “all the necessary due diligence under both US and Canadian securities law.” In arguing its case, Citron cited an Aug. 21 news release from Cronos that announced provincial supply agreements across Canada, without any details about how big those deals were.
