12 Best Long-Term Penny Stocks to Buy According to Hedge Funds

8. Cronos Group Inc. (NASDAQ:CRON)

Stock Price: $2.02

5-Year Sales Growth: 39.66%

Number of Hedge Fund Holders: 13

Cronos Group Inc. (NASDAQ:CRON) is a Canadian company that specializes in cannabis and cannabinoid products. It grows cannabis and produces various cannabis-derived products, which are marketed for both medical use and recreational purposes. The company operates through a diverse brand portfolio including Spinach, PEACE NATURALS, and Lord Jones.

One of the key competitive edges of the company is its association with the tobacco industry giant Altria Group, which maintains a 41% stake in the company. Moreover, Spinach has become the leading cannabis brand in Canada with a 4.8% market share, excelling in the edible and flower categories. Their innovative products, such as SOURZ edibles, have captured a significant portion of the market. In its fiscal third-quarter, the company has experienced a rise in demand for its cannabis flower products, particularly in Canada and Israel. To support the rising demand, Cronos Group Inc. (NASDAQ:CRON) is investing approximately $51 million into expanding GrowCo’s (a component specifically focused on cannabis cultivation) production facilities. This expansion will allow them to consolidate GrowCo’s results into their financials, providing a clearer picture of their overall performance.

During the fiscal third quarter of 2024, the company reported consolidated net revenue of $34.3 million, marking a 38% increase compared to the same period last year. Management attributed growth to higher sales of cannabis flower extracts in Canada and increased flower sales in Israel and other international markets, including Australia, Germany, and the UK. The company has also been focused on reducing its expenses; it aims to save between $5 million to $10 million on a stand-alone basis by 2024.