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Associated press
- Cannabis producer Cronos Group had disappointing sales as losses increased.
- Despite this, stocks were up almost 4% early Thursday.
- Watch the live Cronos group exchanges.
The Cronos group announced Thursday morning that its results for the first quarter were below sales forecasts and showed an increased loss compared to last year. Despite the missed sales, equities rose nearly 4% early in the session, a sign that investors remain optimistic about the sector.
The cannabis producer reported sales of Can $ 6.5 million, which is below the $ 7 million expected by analysts surveyed by Bloomberg. Its loss reached Can $ 9 million, compared to Can $ 1.5 million in the first quarter of last year.
"In the first quarter of 2019, the business was in line with expectations," said Mike Gorenstein, CEO of Cronos Group. "We continue to focus on our strategy of strengthening our supply chain, distribution, intellectual property and brand portfolios."
The Cronos group also announced the completion of several corporate transactions. These included the completion of a $ 2.4 billion Canadian investment by Altria tobacco producer.
Investment, which gives Altria 45% of the company and an opportunity to increase its stake to 55%, valued Cronos at C $ 5.3 billion ($ 4 billion).
"We are delighted to have formally concluded our transaction with Altria and to begin a relationship that is expected to result in significant growth and value creation," added Mr. Gorenstein. "Altria's investment and the services Altria will provide to Cronos Group will enhance our financial resources and allow us to expand our product development and commercialization capabilities."
The Cronos group was up 48% this year until Wednesday.
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