Shares of Cronos Group (NASDAQ: CRON) Prices were down 4.1% at 10:57 a.m. ET on Tuesday, having fallen as much as 5.7% earlier in the day. The decline came after the U.S. Drug Enforcement Administration (DEA) announced it would not hold a public meeting on cannabis reclassification until December 2, 2024 – after the U.S. presidential election.

Cronos wasn’t the only cannabis stock to fall following the news. Several others, including those in the U.S. and Canada, also plunged following the DEA’s announcement.

Why is the DEA date important for Cronos Group?

At first glance, it doesn’t seem to matter to Cronos Group when the DEA holds its public meeting on cannabis reclassification. The company doesn’t sell cannabis products in the U.S. In fact, last year it exited the U.S. market for hemp-derived CBD.

Although Cronos Group does not currently compete in the U.S., it would no doubt like to enter the U.S. cannabis market in the future. The DEA’s decision raises concerns that cannabis may not be reclassified before the next president takes office in January 2025 – or perhaps not at all.

Is Cronos Group stock a buy if the price falls?

I don’t think Cronos Group stock is a good choice to buy on a dip. Cronos remains unprofitable and posted a net loss of $8.7 million last quarter. While there are opportunities in Europe, the lack of presence in the US limits the company’s growth prospects. Investors looking to capitalize on the cannabis market have better alternatives, in my opinion, that are already profitable and have better growth prospects.

Should you invest $1,000 in Cronos Group now?

Before you buy Cronos Group shares, consider the following:

The Motley Fool Stock Advisor The analyst team has just published what they believe to be The 10 best stocks for investors to buy now… and Cronos Group wasn’t one of them. The 10 stocks that made the cut could deliver huge returns in the years to come.

Consider when NVIDIA created this list on April 15, 2005… if you had invested $1,000 at the time of our recommendation, You would have $774,894!*

Stock Advisor offers investors an easy-to-understand plan for success, including instructions on how to build a portfolio, regular updates from analysts, and two new stock recommendations per month. The Stock Advisor Service has more than quadrupled the return of the S&P 500 since 2002*.

View the 10 stocks »

*Stock Advisor returns as of August 26, 2024

Keith Speights does not own any stocks mentioned. The Motley Fool recommends Cronos Group. The Motley Fool has a disclosure policy.

Why Cronos Group Stock Is Falling Today was originally published by The Motley Fool