Toronto-headquartered Cronos Group has announced its Q4 and full-year financial results for 2018.
The headlines: the firm turned over C$17.1m in gross revenue in the year, more than three times its turnover in 2017. FY net revenues stood at C$15.7m.
Cronos Group’s operating loss in the 12-month period stood at C$18.1m, following a C$2.1m operating loss in the prior year.
Full-year net loss came in at C$19.2m in 2018.
Last year was a historic one for Cronos Group, as it became the first pure play cannabis company to list on a major stock exchange in the United States.
The company’s common shares began trading on the NASDAQ under the trading symbol “CRON” in February 2018. Another milestone came in May 2018, as the trading of Cronos Group’s common shares in Canada was up-listed from the TSX Venture Exchange to the Toronto Stock Exchange. In May 2018, the Cronos Group board of directors approved the appointment of KPMG LLP as independent auditor of the company.
In March 2019, Cronos Group closed a $2.4 billion equity investment from Altria Group, Inc., pursuant to a subscription agreement dated December 7, 2018. At closing, Altria also received a warrant to acquire additional common shares of the company that if fully exercised at closing, would provide the Company with approximately $1.4 billion of additional proceeds.
As of the closing date of the Altria Investment, Altria held an approximately 45% ownership interest in Cronos Group, which could now grow to 55% (calculated on a non-diluted basis).
“We are proud of all we have accomplished in 2018 and in the fourth quarter. Over the past year, Cronos Group has diligently focused on our strategic objectives, which culminated in our transformative partnership with Altria Group, Inc.,” said Mike Gorenstein, CEO of Cronos Group. “We’ve expanded our production footprint domestically and internationally, developed our distribution with global partnerships, launched iconic brands for the Canadian adult-use market and grown our IP portfolio with landmark research and development initiatives.”
“At Cronos Group, we take pride in leading the industry forward responsibly and are motivated to create meaningful products that excite our consumers and bring happiness and an improved quality of life. We are very excited to partner with Altria to help us realize our goals. Altria’s investment and the services they provide will enhance our resources and enable us to scale our product development and commercialization capabilities. The growth potential in the cannabis industry is vast and we are only just beginning. With our differentiated brands, global footprint, growing production capacity and commitment to cannabinoid innovation, together with Altria’s partnership, Cronos Group is well positioned to realize this opportunity. We’re heading into 2019 energized and ready to execute on our strategy.”
Cronos Group reported net revenues of C$5.6 million in the fourth quarter 2018 as compared to C$1.6 million for the fourth quarter 2017, representing an increase of C$4.0 million, or 248%. The increase in revenue was driven by shipments to the Canadian adult-use market and growth in cannabis oil revenue.
Cronos Group reported total operating expenses of C$12.4 million in the fourth quarter 2018 as compared to C$2.9 million for the fourth quarter 2017, representing an increase of C$9.5 million, or 328%.Cannabis Business Worldwide