Marijuana company Cronos Group Inc. (NASDAQ: CRON) reported a sharp increase in third-quarter revenues. It also recorded profit for the period, compared to a loss last year. The company’s stock gained modestly early Tuesday, following the announcement.
Total revenue rose sharply to CAD12.7 million during the quarter, mainly due to the launch of adult-use market in Canada and inclusion of the Redwood business.
Net income attributable to the company was CAD788 million or CAD0.53 per share, compared to a loss of CAD7.27 million or CAD0.04 per share in the third quarter of 2018.
During the quarter, 3,142 kg of products were sold in Canada, compared to 514 kg last year. The uptick was due to increased cannabis production and launch of the adult-use market in Canada.
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Meanwhile, cost of sales per gram, before fair value adjustments for sales in the non-US market, decreased 31% annually to CAD2.27 in the third quarter.
“As demonstrated by our progress in the third quarter, we are making great strides to advance the development and diversity of our portfolio and to expand our manufacturing capabilities. We are confident that our platform strategy and focus on consumer-driven innovation will continue to differentiate Cronos Group and drive growth and value creation over the long-term, “said Mike Gorenstein, CEO of Cronos Group.
The company also announced the appointment of Robert Rosenheck, co-founder and CEO of Redwood and the Lord Jones brand, as the head of Cronos Group’s operations, marketing and brand strategy in the US hemp-derived CBD market. Jeff Jacobson, who had been serving as head of sales and business development, has been named general manager of Canada and Europe.
During the quarter, the company closed the acquisition of Redwood’s hemp-based products platform in the US.
Cronos’ shares gained about 2% during Tuesday’s pre-market trading session in the Nasdaq stock exchange, immediately after the announcement, after closing the previous session lower.