Cronos and Canntrust Report Rising Revenue and CostsMay 14, 2019
Both Cronos and CannTrust reported earnings recently for the first quarter of 2019, and in both cases, revenue rose but so did costs.
Cronos reported C$6.5 million ($4.8m) in net revenue for the quarter, which saw the closure of Altria’s $1.8 billion investment in the company. The revenue figure represents a 120% increase from the year-earlier period and a 15% rise from the previous quarter. Adjusted EBITDA, however, showed loss of C$8.95 million ($6.64m) with losses rising 500% from the first quarter of 2018. The company sold 1,111 kg of cannabis in first quarter 2019, up 7% from 1,040 kg in the fourth quarter of 2018. Similar to many of its competitors, losses were driven by efforts to beef up production and staffing, as well as Cronos’ heavy investment in R&D, in particular the opening of a facility in Israel to design cannabis vaporizers.
CannTrust, meanwhile, posted C$16.9 million ($12.5m) in net revenue for the quarter ended March 31, up from C$7.8 million ($5.8m) in the year-earlier period. Some 67% of that figure derived from medical sales, while 33% came from international and recreational wholesale operations. Operating expenses also grew, from C$9.5 million ($7m) in first quarter 2018 to C$16.2 million ($12m) in this year’s first quarter. CannTrust continues to invest heavily in its future growth operations both in Canada and at its planned facility in upstate New York. These expansions already show tremendous progress, yielding a cannabis harvest this quarter of 9,500 kg, 439% higher than the 1,749 kg harvested the first quarter of 2018.—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.