Cronos Posts Sales Gain, But Expansion Costs Hit EarningsMay 12, 2020
Toronto, Canada-based Cronos Group posted revenue of $8.4 million in its fiscal first quarter ended in March, up from $3 million a year earlier. But the company’s adjusted operating loss nearly quadrupled year-over-year, to $41 million, as the cost of expansion continued to rise, and it took an $8 million writedown on dried cannabis and cannabis extracts related to oversupply in the Canadian market.
The sales increase was attributed to growth in Canada’s adult-use market, including the launch of cannabis vaporizers under the Cove, Spinach, and most recently the Peace Naturals brands. Cronos is also active in the U.S. with the Lord Jones CBD brand.
While Cronos has continued production amid the Covid-19 crisis, it warned that Canada’s “provincial purchasers and private retailers have reduced staff onsite, which has led to a decrease in delivery availability and a reduction in the frequency and/or size of purchase orders,” since the outbreak began. Ste. Michelle Wine Estates parent Altria took a 45% stake in Cronos for $1.8 billion in late 2018.—Daniel MarstellerSubscribe 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.