[ad_1]
Investors still have no idea of the amount of recreational pot sold by the Cronos Inc. group, while its losses continued to grow, according to fourth quarter earnings released Tuesday before the opening bell .
Cronos
CRON, -3.51%
CRON, -3.62%
stock fell 5% in Tuesday morning's trade.
According to the results of the last cannabis group in the world in terms of market valuation, it is clear that the Canadian leisure market has not yet proven itself as profitable and efficient, as it had hoped. Cronos echoed his much larger rivals, Aurora Cannabis Inc.
CBA -0.92%
CBA -0.57%
and Canopy Growth Corp.
GSC + 0.07%
CANNABIS, + 0.15%
– in terms of sales – describing the challenges he was facing for the packaging of the leisure pot and the growing uncertainty about the now banned diet of edible products, which is expected to come into effect this year.
And, like many of its rivals in Canada and the United States, Cronos did not make it easy for investors to quickly understand what happened during the quarter.
Embedded in the company's financial statements – and not included in the company's earnings press release – Cronos announced fourth-quarter losses to C $ 11.8 million ($ 8.8 million). dollars), which is six cents a share. This represents a profit of C $ 667,000, or one penny per share in the corresponding quarter of the previous year.
Like its rivals, revenues have increased considerably. Cronos reported gross sales of C $ 5.6 million in the fourth quarter, up from C $ 1.6 million for the same period last year. The Toronto-based company sold 1,040 kilograms of cannabis, which includes dried flowers and cannabis oil. According to analysts surveyed by FactSet, Wall Street's revenue is expected to reach $ 10.4 million.
A guide to pot stocks: What you need to know to invest in cannabis companies
But Cronos did not reveal the volume of pot sold to adults in the leisure market, which Canada legalized on October 17th. CEO Mike Gorenstein said at the teleconference Tuesday morning that Canada continues to face a "shortage" planned to further inform investors about its recreational sales in the future, when the market is over. stable.
"[Noussommesincitésàvendremoinsdepétrolecarlataxed'accisepeutêtrepénalisante"adéclaréGorensteindanssonappelfaisantréférenceàl'huiledecannabisparoppositionàunefleurpourfumerÀcausedecelalesventesdeCronosétaientorientéesverslesfleursquireprésentaientenviron75desrevenusduquatrièmetrimestreLepétrolereprésentaitlagrandemajoritédes25%remaining%[We'reincentivizedtoselllessoilbecausetheexcisetaxcanbepunishing"GorensteinsaidinthecallreferringtocannabisoilversusflowerforsmokingBecauseofthatCronossaleswereskewedtowardflowerwhichaccountedforroughly75%offourth-quarterrevenueOilaccountedforthevastmajorityoftheremaining25%[Noussommesincitésàvendremoinsdepétrolecarlataxed’accisepeutêtrepénalisante”adéclaréGorensteindanssonappelfaisantréférenceàl’huiledecannabisparoppositionàunefleurpourfumerÀcausedecelalesventesdeCronosétaientorientéesverslesfleursquireprésentaientenviron75%desrevenusduquatrièmetrimestreLepétrolereprésentaitlagrandemajoritédes25%restants[We’reincentivizedtoselllessoilbecausetheexcisetaxcanbepunishing”GorensteinsaidinthecallreferringtocannabisoilversusflowerforsmokingBecauseofthatCronossaleswereskewedtowardflowerwhichaccountedforroughly75%offourth-quarterrevenueOilaccountedforthevastmajorityoftheremaining25%
Cronos also did not disclose the amount of leisure pot after the company's revenue in September, but said they accounted for a "major" share.
The transformation of cannabis for the leisure market remains a challenge for Cronos, as for its rivals. Management can say that it can grow enough pot to meet current demand, but taking raw marijuana plants and turning them into packaged products, including adding the prescribed excise stamp. by the federal government remains problematic.
"We want to make sure that we can effectively deliver the product to all partners with whom we are engaged," Gorenstein said. "Every time you add a province, you add complications to other aspects of the supply chain."
Cronos plans to expand beyond the four provinces it is in, but it will not do so until "we can not do everything right in terms of automation before we grow all over the world." country".
See also: CBD is sold in the largest pharmacy chain in the United States.
Automation is one of the areas of expertise of the manufacturer of Marlboro Altria Group Inc.
MO + 0.66%
as part of its investment could prove useful. – with 2.4 billion Canadian dollars in cash. This money has bought Altria 45% of Cronos, with the right to acquire a majority stake in the future.
In the short term, many current and former executives have joined the Cronos Group: for example, Jerry Barbato, Altria's Executive Vice President and Strategy and Growth Director, is replacing outgoing Chief Financial Officer William Hilson. Hilson will stay in Cronos as commercial director of the company.
During the conference call Tuesday morning, Mr. Gorenstein said that after the conclusion of the Altria agreement in March, Cronos' priorities were to acquire talent and focus on research and development. Development. Altria will be able to help develop products in Canada and help Cronos become a "leader in accountability" that "will be needed to participate in a sustainable and long-term industry."
The Vape pen and the pre-wound seals were other areas, said the general manager, said the Altria experience would be helpful. In particular, with regard to pre-rolled joints, which are a high margin product for many cannabis producing companies, Mr. Gorenstein stated that Altria could help the appearance of the product, at the same time. how it was packaged and presented to consumers, as well as the production of the joints themselves.
"We think it's a more important differentiator than culture," Gorenstein said.
Do not miss: The stock of Tilray increases after the company has shown that it can sell leisure pot
To hear Gorenstain, even with the influx of tobacco money, the ambitions of society have hardly changed. Cronos eyeing the United States after passing the Farm Bill: Cronos has no assets in hemp or cannabidiol, a compound that many consider non-psychoactive and found in marijuana. However, the focus remains on developing an approach to creating and distributing consumer brands in Canada, as well as medical applications, which Cronos will then roll out around the world.
"Our business model is not to be the farmer," Gorenstein said. "Our goal will be making cheese, instead of raising and milking the cow."
The Cronos stock has increased by 162% over the past year, after almost doubling after the publication of the public investment in Altria in December. Over the past year, Horizons Marijuana Life Sciences Index
HMMJ, + 0.18%
earned 25%, ETFMG Alternative Harvest ETF
MJ + 0.54%
rose 20% and the S & P 500 index
SPX, + 0.60%
gained 5.3%.
Cannabis Watch: All Cannabis Business Coverage by MarketWatch
[ad_2]
Source link