CannTrust, Cronos See Sales Rise, But Costs Hit Bottom LineApril 2, 2019
Canadian cannabis firms CannTrust and Cronos both enjoyed increasing sales in their respective fiscal years ended in December, although investment costs took a toll on earnings.
CannTrust’s annual revenue totaled C$45.6 million ($33.9 million), up from C$20.7 million ($15.4 million) in 2017. Volume jumped 450% in the latter part of the year, from 758kg equivalents in the fourth quarter of 2017 to 3,407kg equivalents a year later, while the production cost of a gram of cannabis dropped from C$5.16 ($3.83) to C$2.94 ($2.19). However, CannTrust’s adjusted EBITDA swung from C$2.8 million ($2.1m) in 2017 to a loss of C$7.2 million ($5.4m) for the 2018 fiscal year.
CannTrust CEO Peter Aceto noted that preparing for recreational legalization last October entailed training hundreds of new staff and absorbing the costs of a new production facility, enhanced product testing, and quality assurance. CannTrust has a nationwide partnership with Breakthru-owned brokerage Kindred.
Cronos Group, which last year received a C$2.4 billion ($1.8b) investment from Altria, reported net revenue of C$15.7 million ($11.7m) for 2018, more than tripling its total of the previous year. But operating losses widened significantly as well, from C$2.1 million ($1.6 million) to C$18.1 million ($13.5 million), with the company citing “research and development” and “talent acquisition” costs. In the fourth quarter, Cronos rolled out its Cove and Spinach recreational brands across Ontario, British Columbia, Nova Scotia, Prince Edward Island and Saskatchewan. The company also has a Canadian joint venture with MedMen, which is focused on creating a Canadian branded retail chain in provinces that permit private retailers.—Danny SullivanSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.