Mr. Mike Gorenstein reports
CRONOS GROUP INC. ANNOUNCES FIRST QUARTER 2018 RESULTS
Cronos Group Inc. has provided its financial results for the first quarter ended March 31, 2018.
"We are pleased that the strategic initiatives launched in 2017 are coming to fruition," said Mike Gorenstein, chief executive officer of Cronos Group. "Two thousand seventeen was a building block year which set the groundwork and foundation for the results achieved in the first quarter. Cronos is focused on continuing to increase capacity in order to serve existing distribution and newly established markets, developing intellectual property, and launching recreational brands."
First quarter 2018 highlights
Sales were $2.9-million for the first quarter of 2018 as compared with $500,000 for the first quarter of 2017, representing an increase of $2.4-million, or 473 per cent. Compared with the fourth quarter of 2017, sales increased by $1.3-million, or 83 per cent, for the first quarter of 2018.
Since November, 2017, when Health Canada approved the company's new extraction laboratory, Cronos Group has ramped up production of strain-specific cannabis oils that have been received favourably by customers. In Q1 2018, cannabis oil sales represented 29 per cent of domestic medical patient revenue. The company expects oil sales to continue to become a larger part of sales over time.
In February, 2018, Cronos Group became the first licensed producer to list on a major stock exchange in the United States. The company's common shares trade on the Nasdaq under the trading symbol CRON.
In February, 2018, the company announced a strategic joint venture in Australia for the research, production, manufacture and distribution of medical cannabis. The company owns a 50-per-cent equity interest in Cronos Australia. In the initial phase of the joint venture, Cronos Australia is planning to construct a 20,000-square-foot purpose-built indoor facility that is expected to produce up to 2,000 kilograms of cannabis annually.
In March, 2018, Cronos Group announced a strategic joint venture with MedMen Enterprises USA LLC. The company owns a 50-per-cent equity interest in the joint venture MedMen Canada Inc. MedMen Canada is focused on branded products, research and development activities in Canada, and creating a Canadian-branded retail chain in provinces that permit private retailers.
In January, 2018, Peace Naturals received a dealer's licence from Health Canada pursuant to the Narcotic Control Regulations and the Controlled Drugs and Substances Act (Canada) (CDSA) for the possession, sale, transportation and delivery of controlled substances under the CDSA. The Peace Naturals dealer's licence allows Peace Naturals to develop products that are not yet available for sale in Canada and to export medical cannabis extracts, including concentrated oil and resin products.
Completed construction of, received regulatory approvals for and commenced cultivation of cannabis in the 28,000 square ft greenhouse at Peace Naturals. The greenhouse's first harvest is expected to occur in the second quarter of 2018.
Completed a rebrand of Peace Naturals, which included new proprietary packaging, an evolution of the brand's logo, new marketing materials, a revised website, a new shopping portal experience and new products, such as strain specific oils and limited edition cultivars. Peace Naturals also established a new classification system for products, which helped educate patients on key product differences.
Strengthened liquidity by raising $46.0-million of gross proceeds through a bought deal offering by way of a short form prospectus offering in Canada in January, 2018.
Highlights subsequent to first quarter 2018
Strengthened liquidity by raising $100.0-million of gross proceeds through a bought deal offering in April, 2018. The common shares were offered in the United States pursuant to the company's effective registration statement on Form F-10, filed with the U.S. Securities and Exchange Commission, and in Canada by way of a short form prospectus offering.
The company will host a conference call on Tuesday, May 15, 2018, at 8 a.m. EST to discuss first quarter 2018 results. The call will last approximately one hour. Instructions for the conference call are provided below.
Conference ID: 6517419
Toll-free dial-in number: 888-231-8191
International dial-in number: 647-427-7450
Additionally, an audio replay of the conference call will be available two hours after the call's completion and until 11:59 p.m. EST on May 29, 2018. Instructions for the audio replay are provided below.
Toll-free dial-in number: 855-859-2056
About Cronos Group Inc.
Cronos Group is a globally diversified and vertically integrated cannabis company with a presence across four continents. The company operates two wholly owned Canadian licensed producers regulated under Health Canada's Access to Cannabis for Medical Purposes Regulations: Peace Naturals Project Inc., which was the first non-incumbent medical cannabis licence granted by Health Canada, and Original BC Ltd. (British Columbia), which is based in the Okanagan Valley.
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