On Friday, Cronos Group Inc. (TSX: CRON) (Nasdaq: CRON) released second quarter financial results and reported several important developments.
From higher cannabis sales to the appointment of a new CFO, we believe that Cronos is in the early innings of a major growth cycle. We believe the Canadian cannabis company is starting to benefit from its leverage to strategic international markets and is an opportunity that we are closely following.
Today, we want to highlight 15 key takeaways from Cronos’ second quarter earnings report and believe our readers need to be aware of these developments:
- During the quarter, Cronos reported $15.6 million of total revenue (which is $5.7 million higher than the same quarter of 2020). The increase was primarily related to higher recreational cannabis sales in Canada and higher medical cannabis sales in Israel
- Inventory write-downs for the second quarter were $12 million which is $8.9 million higher than the second quarter of 2020
- When compared to the second quarter of 2020, Cronos’ adjusted EBITDA loss increased by $22.8 million and recorded an adjusted EBITDA loss of $49.8 million. The increase is primarily related to higher sales and marketing costs (due to brand development in the US) and higher R&D costs (due to higher spending on product development and developing cannabinoid IP for international markets)
- When compared to the second quarter of 2020, capital expenditures decreased by $6.5 million due to lower construction costs and lower costs associated with Cronos’ enterprise resource planning system
- A few months ago, Cronos acquired 10.5% of PharmaCann, a leading vertically integrated US cannabis company with operations in New York, Illinois, Ohio, Maryland, Pennsylvania, and Massachusetts. Once cannabis is legalized at the federal level in the US, Cronos and PharmaCann will enter into commercial agreements to offer its products through either company’s distribution channels.
- In June, Cronos Group launched SOURZ by Spinach™, a new line of cannabis gummies for the Canadian recreational market. According to Hifyre™ data, the brand had a double-digit market share in the edibles category in July and August (to-date).
- A few months ago, Cronos Group launched a new line of cannabis concentrates for the Canadian recreational market.
- Cronos’ US growth strategy is centered around creating long-term shareholder value by assembling a best-in-class brand and intellectual property (IP) portfolio. The company is executing on a strategy to deploy its products in the US market through investments and partnerships
- In the US, Cronos relaunched PEACE+™, a hemp-derived CBD offering that is positioned to capitalize on the US market
- After the second quarter, Cronos launched Happy Dance™, a new facial skin care product. The product is available online to US consumers through the brand’s website. The product line can also be purchased from ULTA Beauty’s website and is expected to become available at ULTA Beauty™ stores throughout the US in the coming weeks.
- In June, Cronos and Ginkgo Bioworks announced an amended collaboration and license agreement to accelerate the commercialization of cultured cannabinoids at scale. Cronos is prioritizing rare cannabinoids and plans to start commercial production and subsequent product launches in the near future
- Announced that Bob Madore will succeed Jerry Barbato as Chief Financial Officer (effective August 9th). Cronos believes that his operational capabilities and experience at high profile global consumer brands will play a key role in the company’s efforts to capitalize on growth opportunities, execute on regional strategies, and work to innovate new products at the brand level
- Kendrick Ashton Jr. was elected to Cronos Group’s Board of Directors. He is the co-founder and Co-CEO of The St. James, a leading developer and operator of performance, wellness and lifestyle brands, experiences and destinations.
- In April, Thomas Cohn joined Cronos as Head of Regulatory and Product. He joined the company from The Avon Company, where he served as General Counsel and Corporate Secretary.
- In July 2021, Anthony Parisi joined Cronos Group as Global Head of Audit, a newly formed role for the company.
If you are interested in learning more about Cronos’ second quarter earnings report, please send an email to firstname.lastname@example.org with the subject “Cronos Group” to be added to our distribution list.
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