Cronos Group CBD Co. Shares Slightly Down After Announcing Q2 2021 Results And New CFO Appointment

CBD company Cronos Group Inc. CRON CRON reported its financial results on Friday for the second quarter of 2021, revealing a 58% year-over-year increase in consolidated net revenue which totaled $15.6 million. In six months ended June 30, consolidated net revenue amounted to $28.2 million.

The gross loss increased by $12.9 million from the same quarter of last year, reaching $15.8 million in the three months ended June 30. The gross margin was negative at 101%, compared to a negative 30% in the prior-year period.

Adjusted EBITDA, a non-GAAP measure, came in negative at $49.8 million in the quarter versus a roughly $27 million loss in the same quarter of 2020.

Capital expenditures totaled $2.1 million, declining by $6.5 million from the corresponding period of the previous year.

As of June 30, the Toronto-based company had approximately $896 million in cash and cash equivalents, $201.6 million in short-term investments and $2.12 million in capital expenditures.

Q2 2021 Business And Operational Highlights

In June, Cronos revealed that it is purchasing a 10.5% ownership stake in PharmaCann for approximately $110.4 million through its wholly-owned subsidiary.

Currently, PharmaCann’s footprint includes six production facilities and 24 dispensaries operating under the Verilife brand across six limited license states including New York, Illinois, Ohio, Maryland, Pennsylvania and Massachusetts.

“In the second quarter of 2021, we were able to lock in a component of that strategy as we made a strategic investment in PharmaCann, a leading vertically integrated U.S. cannabis company,” said Kurt Schmidt, the company’s president and CEO. “We look forward to capitalizing on opportunities in the U.S. that we expect will strengthen our ability to compete in this emerging market.”

Separately, Cronos also introduced a new line of cannabis gummies into the Canadian recreational market: SOURZ by Spinach and a new line of cannabis concentrates, Spinach DABS. 

Spinach brand’s offering was bolstered during the quarter with a 28-gram format for Spinach flower, Spinach Nuggetz and a new flower SKU, Spinach GMO Cookies, available in select markets in Canada.

The company also re-launched PEACE+, its U.S. hemp-derived CBD offering, with an initial product portfolio consisting of four tinctures.

“Having brands across price points and usage occasions is critical to meeting consumer needs in the CBD category,” Schmidt added.

In addition, the company revealed that a finance expert with over three decades of experience, Bob Madore, agreed to join its leadership team as CFO, succeeding Jerry Barbato.

“Cronos Group has built a premier portfolio of innovative products supported by a solid balance sheet, and it is an honor to join the Company at such an exciting time in its development,” Madore said.

Price Action

Cronos Group’s shares were trading 4.39% lower at $7.09 per share at the time of writing Friday morning.

Photo: Courtesy of Kimzy Nanney on Unsplash

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