Canadian cannabis company Cronos Group Inc CRON reported first-quarter results Thursday that included revenue growth of 120 percent on the year driven by legalization of adult-use cannabis and strong CBD oil sales.
What Happened
Cronos Group's net revenue amounted to CA$6.47 million ($4.8 million), up from CA$2.95 million a year earlier. Compared to the previous quarter, the company's revenue rose by 15 percent mainly on the back of higher sales of CBD oil and flower.
Sales of extracts represented 23 percent of Cronos Group's net revenue in the first quarter versus a share of 9 percent the previous year.
Cronos sold 1,111 kilograms of cannabis during the first three months of 2019, up by 122 percent on the year and by 7 percent on the quarter. The cost of sales before fair value adjustments declined by 14 percent on the year to CA$2.69 per gram.
The company reported net income of CA$427.69 million versus a loss of C$1.05 million in the first quarter of 2018.
The bulk of the net income was a non-cash unrealized gain on revaluation of deriviative liabilities of CA$436.4 million. The company's adjusted EBITDA represented a loss of CA$8.95 million, wider than the loss of CA$1.5 million a year earlier.
Why It's Important
Cronos Group is one of the leading cannabis companies in Canada. In the first quarter, it closed a CA$2.4-billion strategic investment from tobacco company Altria Group Inc. MO.
In addition, Cronos aims to strengthen its position in the vaporizers space. The company recently announced the opening of a global R&D center in Israel that will focus on developing next-generation vaporizers for cannabis consumption.
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