Cronos Group Inc (NASDAQ: CRON) on Thursday morning reported better-than-expected second quarter revenue, pushing its shares higher in premarket trade. The Canadian marijuana producer said revenue for its latest quarter rose 202% from the prior-year period, and 58% from Q1 2019.
Management attributed the revenue growth to the launch of Canada’s adult-use cannabis market, as well as higher sales in CBD oil and dry flower. Cronos sold 1,584 kilograms during the quarter, a 232% increase from the 477 kilograms that the company sold in the second quarter of 2018.
Shares of the Toronto-based company were up 9% to trade at $15.70 apiece in the premarket session today, following the earnings report. The stock has gained more than 36% so far this year.
CRON Earnings & Outlook
Cronos posted adjusted core loss of C$17.8 million ($13.37 million) during the quarter, up from C$2.4 million ($1.8 million) in the same period last year. The company had earnings of C$0.22 per share in the second quarter, beating Refinitiv consensus for a loss of C$0.03 per share.
Total revenue came to CA$10.237 million ($7.691 million), a 202% rise from revenue of CA$3.394 million ($2.550 million) in the second quarter of the previous year.
Costs per gram jumped 14% to C$3.01 in the second quarter, from $2.63 per gram during the first quarter. Cronos said the increase was driven by higher processing costs on a per gram basis as the company ramped up cannabis oil production.
Cronos Group CEO Comments
“During the second quarter, Cronos Group expanded its R&D capabilities, innovation expertise and global infrastructure network in what has been a year of tremendous growth. We opened Cronos Device Labs, our new global R&D center in Israel, announced the acquisition of our new state-of-the-art fermentation facility and added Dr. Todd Abraham as Chief Innovation Officer to our executive leadership team,” said Mike Gorenstein, CEO of Cronos Group.
“We also took steps to enter the U.S. market with our recent acquisition of Redwood Holding’s hemp-based CBD platform. As we look ahead, we will continue to capitalize on this momentum by building on our partnerships with Altria and Gingko Bioworks and leveraging our collective resources and expertise to realize the significant potential in the growing cannabis industry.”
Cronos Group Inc Profile
Cronos Group Inc., headquartered in Toronto, Canada cultivates and sells medicinal and recreational cannabis through its medicinal brand, Peace Naturals, and its two recreational brands, COVE and Spinach.
Although it primarily operates in Canada, Cronos exports medical cannabis to Poland and Germany. In addition, it has entered joint ventures in Israel, Colombia, and Australia to drive further international cultivation and distribution growth. – Warrior Trading News