Business Corpus: This Marijuana Stock Signs Huge Deal To Supply U.S. Giant's Cannabis Oil FacilityCronos Group has sealed a deal to supply marijuana to a U.S. cannabis company's forthcoming oil production facility in Canada. The post This Marijuana Stock Signs Huge Deal To Supply U.S. Giant's Cannabis Oil Facility appeared first on Investor's Business Daily.

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Marijuana stock Cronos Group (CRON) has sealed a five-year deal to supply a U.S. cannabis oil company's forthcoming production facility in Canada.

Cronos Group will supply Oregon firm Cura's Canadian arm with at least 20,000 kilograms (44,092 lbs.) of cannabis every year. It will select and cultivate strains for Cura's CBD oil extraction operation. Cura plans to build a proprietary facility in British Columbia.

Cronos stock fell 1.3% to 6.02 on the stock market today. Among other marijuana stocks, Canopy Growth (CGC), whose Canadian ticker is WEED, edged up 0.4%. Tilray (TLRY), the first pure-play marijuana IPO on a big U.S. exchange, slid 1.1%. Marijuana-focused exchange-traded fund MG Alternative Harvest (MJ) fell 0.4%. AdvisorShares Vice ETF (ACT), which also has exposure to cannabis, was flat.

Cura is eyeing the cannabis oil facility as a hub for the Canadian and fledgling international markets.

The company claims to have pioneered a highly refined extraction system that can produce 1 million grams of high quality oil per month at each facility. Cura is known for its Select Oil and Select CBD brands.

Meanwhile Cronos CEO Mike Gorenstein said this is the "start to a synergistic collaboration" between the two companies.

Marijuana Stock Trouble Ahead?

While legal marijuana markets are expanding, the profit potential may not be as high as claimed. Legalizing recreational use in California this year has not killed off illicit sales so far. Blame steep markups and high taxes in legal pot shops, along with local restrictions, according to a survey by marijuana delivery service Eaze.

"Unlicensed retailers do not have to comply with worker protection laws, test products for pesticides and processing chemicals, or remit taxes," said Eaze. "That results in a large pricing benefit."

California is the world's biggest recreational marijuana market.

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The post This Marijuana Stock Signs Huge Deal To Supply U.S. Giant's Cannabis Oil Facility appeared first on Investor's Business Daily.