Cronos Australia, the local offshoot of Canadian pot giant Cronos, is planning an initial public offering in Australia.

As flagged by Stockhead in October, the company is said to be looking to raise about $50 million and is pitching itself as another local-pot-stock-with-Canadian-connections.

An increasing number of Aussie pot stocks have a Canadian connection, but local investors are not convinced yet as to the foreign companies’ motives.

Some are hopeful the Canadian connection will turn into a takeover, while others suspect shareholdings, such as Aurora’s 23 per cent in Cann Group (ASX:CAN) or Canopy’s 11 per cent of AusCann (ASX:AC8), could be detrimental to the local companies’ growth.

Cronos Australia was launched in February as a 50-50 joint venture with NewSouthern Capital which is led by former soldier and BCG management consultant Rodney Cocks and property developer Peter Righetti.

They’re hoping for a $180m-$200m market cap according to the AFR, which would make it the second biggest ASX pot stock after Cann.

Cronos Australia has a growers licence, a research licence, and a manufacturing licence, and plans to build a growing facility on a 120 acre site in Daylesford, Victoria, from 2020.

The Australian operation — intended as a hub for Australia, New Zealand and Southeast Asia — was originally designed to produce 2 tonnes of pot per year.

But Cronos is now “reviewing alternative facility designs given current and anticipated market opportunities, which may include an expansion of the previously announced plans for a 20,000 sq. ft. purpose-built indoor facility,” the group said this week in its quarterly results.

Right now three companies are growing cannabis in Australia: Cann, and unlisted companies Little Green Pharma and Medifarm.

THC Global (ASX:THC) is waiting on final permits to start growing — a permit is needed after a licence is obtained to grow or make cannabis products — which it expects next month.