Cronos Group (CRON) reported a higher revenue but a larger gross loss in its second quarter than a year earlier. The Canadian cannabinoid company has international production and distribution across five continents.
Net revenue for Q2 2021 came in at $15.6 million, an increase of 57.6% from the revenue of $9.9 million reported in Q2 2020. Continued growth in the Canadian adult-use cannabis market and higher sales in the Israeli medical cannabis market were among the main drivers of revenue growth.
Meanwhile, the company reported a gross loss of $15.8 million in Q2 2021, compared to a gross loss of $2.9 million in Q2 2020. Operating expenses also grew year-over-year, climbing to $44.4 million. (See Cronos Group stock charts on TipRanks)
The company posted a net profit of $56.8 million, which is mainly attributable to a $115.2 million gain on reevaluation of its derivative liabilities. Adjusted EBITDA stood at a loss of $49.8 million.
During the quarter, Cronos launched SOURZ by Spinach gummies into the Canadian adult-use market.
Cronos president and CEO Kurt Schmidt said, “Our U.S. growth strategy focuses on delivering long-term shareholder value by assembling a best-in-class brand and intellectual property portfolio and positioning to deploy our products in the U.S. market through investments and opportunities with companies that share our vision and commitment to responsibly distributing disruptive cannabinoid products that improve people’s lives.
“In the second quarter of 2021, we were able to lock in a component of that strategy as we made a strategic investment in PharmaCann, a leading vertically integrated U.S. cannabis company. We look forward to capitalizing on opportunities in the U.S. that we expect will strengthen our ability to compete in this emerging market.”
The company also announced the appointment of Bob Madore as CFO, replacing Jerry Barbato. The reason for his departure was not provided.
Two months ago, Canaccord Genuity analyst Matt Bottomley reiterated a Sell rating on CRON with a C$7.50 price target. This implies 18.2% downside potential.
Overall, CRON scores a Hold consensus rating among analysts based on two Buys, one Hold, and one Sell. The average Cronos Group price target of C$9.50 implies 3.2% upside potential to current levels.
The post Cronos Group Posts Larger Gross Loss in Q2 appeared first on TipRanks Financial Blog.