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Cannabis producer Cronos loses $111.7 million in fourth quarter

Canadian cannabis producer Cronos Group reported a quarterly loss of $111.7 million and an adjusted EBITDA of negative $53.1 million, according to the full-year and fourth-quarter results released Friday, well below analyst expectations.

However, Cronos exceeded analyst expectations on sales, with net revenue of $17 million in the quarter ended Dec. 31, 2020, up from the previous quarter’s $11.4 million.

The company, which has its head office in Toronto, said it had $1.1 billion in cash as of Feb. 23, 2021.

On a call with analysts to discuss the quarter, CEO Kurt Schmidt said the company formed an internal team, led by Executive Chair Mike Gorenstein, to analyze opportunities and potential strategies in the U.S. market.

Schmidt said Cronos is prioritizing rare cannabinoids.

“Cronos is prioritizing rare cannabinoids, such as CBG, over common ones, such as THC and CBD, and plans to (initiate) commercial production and subsequent product launches based on this approach,” he told analysts.

Canada, he said, is an important platform to develop products for other markets, such as the U.S. and Israel, as regulations allow.

On Cronos’ 2018 partnership with Ginkgo Bioworks, an arrangement in which the Boston firm will research and design microorganisms, Schmidt said:

“We currently expect to achieve commercialization by the third quarter of 2021, and we really are prioritizing rare cannabinoids, because we believe that’s going to be a greater ability to innovate and provide consumers with differentiated products.”

Schmidt said he couldn’t talk about specific products.

By region, Cronos reported net revenue of:

  • $3.5 million in the United States.
  • $13.5 million in the rest of the world.

Cronos does not disclose its sales in the Canadian market.

Cronos trades as CRON on the Toronto Stock Exchange and the Nasdaq.

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