Cronos Group Stock Falls ~5% after Q1 Earnings Release
Cronos Group (CRON) reported its first-quarter earnings on May 15. The company’s sales rose almost 4.8 times year-over-year to 2.9 million Canadian dollars from 0.5 million Canadian dollars in the first quarter of 2017. Sequentially, sales grew 83% from 1.3 million Canadian dollars.
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How stocks reacted
After the company’s earnings release, Cronos’s stock dropped almost 5% to 8 Canadian dollars on May 15, and the stock fell almost 22% YTD (year-to-date). Most of the cannabis stocks have delivered negative returns YTD including Aurora Cannabis (ACBFF) with a fall of 34%, Aphria (APHQF) with a fall of 36%, and MedReleaf (MEDFF) with a fall of 7%.
Other notes from earnings
While the company’s top line grew substantially, it still reported a net loss of about 1.27 million Canadian dollars, which was slightly better than the estimated loss of 1.34 million Canadian dollars at the time of the report.
The loss was expected, as the company is ramping up operations to gear up for the upcoming legalization of recreational marijuana in Canada (HMMJ). The company also reported that it has completed the construction of a 28,000-square-foot production facility. The company further stated that it received the necessary regulatory approvals for cultivating cannabis at this location, and its first harvest is expected to take place in the second quarter.
The company’s previous financing of 46 million Canadian dollars from a bought deal in Canada and another 100 million from listing shares in the US is supporting the company’s expansion plans. To learn more about Cronos’s expansion plans, read How Cannabis Companies Are Rushing to Expand Operations.