Cronos Group records $107.7-million loss from April to June

On the upside, the Toronto-based weed company is now selling its Peace Naturals dried flower products to medical patients in Israel

Cronos Group quarterly report

Photo by Cronos Group

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In its latest quarterly report, a Toronto-based cannabis company has recorded a sizeable loss. From April to June, Cronos Group was in the red by $107.7 million. That was due in part to a $35.9-million loss on the revaluation of derivative liabilities.

In addition, Cronos Group absorbed a $40-million charge for loss on goodwill and intangible benefits. That was on top of an operating loss of $34.6 million.

In the same quarter of 2019, Cronos Group recorded net income of $185.9 million. That was due largely to a $197.3-million gain on the revaluation of derivative liabilities.

On the upside, Cronos Group posted net revenue of $9.9 million in its quarterly report. That marked a $2.2-million gain over the same three months in 2019.

In the recent quarter, Cronos began selling Peace Naturals dried flower products to medical patients in Israel.

“During these extraordinary times, it is very encouraging to see that we are making progress against our strategy across our global footprint,” CEO Mike Gorenstein said in a news release.

However, the company incurred a $3.1-million write-down on dried cannabis and cannabis extracts. This was “primarily driven by cannabis product price compression in the Canadian market”, according to the quarterly report.

“We anticipate further inventory write-downs due to pricing pressures in the marketplace, as well as increased marginal production costs at the Peace Naturals Campus,” the company stated.

Cronos Group is flush with cash

Cronos Group’s balance sheet lists $1.1 million in cash and cash equivalents, as well as $213,614 in short-term investments. As a result, it’s in a good position to weather the storm of COVID-19.

In the first hour of trading, the company’s shares declined by 12.34 percent, falling to $8.10 on the Toronto Stock Exchange. Investors have valued Cronos at $2.83 billion.

In 2018, Cronos Group became the first Canadian cannabis company to trade on NASDAQ.

Charlie Smith

I'm the editor of the Georgia Straight newspaper in Vancouver, as well as a CannCentral contributor.

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