What happened

Shares of Cronos Group (CRON -5.38%) are tumbling 16.5% in morning trading Tuesday after the Canadian marijuana company filed a form 12b-25 with the Securities and Exchange Commission saying it would be unable to file its quarterly earnings report on time. 

Cronos said it needs more time to figure out just how big of an impairment charge it's going to take on its cannabidiol (CBD) business, but it's going to take a hit of at least $220 million to its goodwill and intangible assets.

Marijuana plant in a greenhouse,

Image source: Getty Images.

So what

It was just yesterday that its shares were soaring on speculation that Altria would acquire the pot stock

The tobacco giant invested $1.8 billion in Cronos in 2019 in exchange for a 45% stake in the company, but Altria has itself been writing down the value of that investment over time. However, a recent setback in the introduction of the IQOS heated tobacco device from Philip Morris International because it violates British American Tobacco patents had some thinking now would be the time Altria made a direct move into marijuana.

A filing delay by Cronos had investors suspecting a big acquisition announcement was in the works, but instead it turns out it's a more mundane write-down of its own assets.

Now what

In 2019 Cronos acquired Redwood Holding for $300 million to gain access to its Lord Jones brand of CBD-infused lotions, gummies, bath salts, and oils. 

Just this year, Cronos had begun investing in the brand with a new marketing campaign, but the wheels seem to have quickly come off as last quarter it began writing down the value of the brand by $40 million and now seems to think Lord Jones is quickly sinking.