Sales soar for Altria-backed cannabis firm Cronos

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Yet another cannabis company has reported strong sales growth following the legalization of recreational pot in Canada.

Yet another cannabis company has reported strong sales growth following the legalization of recreational pot in Canada.

Cronos Group (CRON), which has the financial backing of Marlboro owner Altria (MO), said Tuesday that revenue in its most recent quarter soared 248% compared with the same period a year ago. The news follows similarly solid sales increases from rivals Canopy Growth (CGC), Aurora (ACB) and Tilray (TLRY).

Shares of Cronos fell in early trading on the news following a big spike Monday. But the stock has nearly doubled this year, as investors bet that Cronos will have an upper hand on rivals thanks to its Altria partnership. Altria now owns 45% of the company and has the right to boost the stake to 55%.

But some worry that the surge for Cronos and other cannabis stocks is a bubble that about to burst. Canopy, which is backed by Corona owner Constellation Brands (STZ), is up 65% so far in 2019. And Aurora, which recently hired activist investor Nelson Peltz as an advisor to try and find a strategic partner, is up more than 85%.

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