- Cronos Group (CRON) has revealed its second quarter results, following a difficult few months for the cannabis industry
- The company’s generated $13.14 million in net revenue, compared to C$10.18 million in the previous year’s corresponding period
- The gross profit for the quarter was a loss of $3.92 million, versus a $5.44 million profit last year
- The company attributed the loss to an increase in the cost of sales driven by a higher volume of adult use sales and the lack of wholesale revenue, as well as the impact of COVID-19
- Cronos Group (CRON) is down 13.42 per cent and is trading at $8.00 per share
Cronos Group (CRON) has revealed its second quarter results, following a difficult few months for the cannabis industry.
The cannabis manufacturer and retailer saw revenues for the quarter grow, but profitability fell dramatically.
The company’s generated $13.14 million in net revenue, compared to C$10.18 million in the previous year’s corresponding period.
As the company’s operations have expanded significantly over the last year, the steady revenue ultimately led to a drop in gross profit, at just $3.92 million, compared to a $5.44 million profit in last year’s comparable quarter.
An increase in the cost of sales driven by a higher volume of adult use sales and the lack of wholesale revenue also contributed to the lower profits.
The company was further impacted by coronavirus shutdowns, as it had to write down $4.12 million in dried cannabis and cannabis extracts, that it couldn’t be sold during the pandemic.
The company has revealed that anticipates further inventory write downs due to pricing pressures in the marketplace, as well as increased marginal production costs.
The company’s CEO Mike Gorenstien said the company had continued to make progress despite unprecedented shifts in our industry and the global economy.
“We officially entered the Israeli medical cannabis market, with Cronos Israel commencing the sale of branded dried flower products to medical patients.
“During these extraordinary times, it is very encouraging to see that we are making progress against our strategy across our global footprint.
“While following safety guidelines, our employees are finding new and creative ways to keep our production, manufacturing and R&D facilities operating, and we are bringing new products and brands to markets across the globe,” he said.
Cronos Group (CRON) is down 13.42 per cent and is trading at $8.00 per share at 10:45 am EDT.
