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Cannabis Summary for April 28, 2020

2020-04-28 20:19 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index lost 5.3 points to 135.84 Tuesday, while the Canadian Securities Exchange Composite Index lost 6.61 points to 313.14. Illinois-based Cresco Labs Inc. (CL) dropped 68 cents to $5.47 on 1.4 million shares after releasing its fourth quarter and full-year 2019 results. The cannabis producer reported an eye-popping Q4 loss of $45.2-million (U.S.) on revenue of $41.4-million (U.S.), compared with a Q3 loss of $8.5-million (U.S.) on revenue of $36.2-million (U.S.). The results looked bad both on a quarter-to-quarter basis and in the eyes of analysts. The fourth quarter revenue of $41.4-million (U.S.) was short of the average analyst expectation of $43.7-million (U.S.) and the company's loss of $45.2-million (U.S.) far exceeded the $18-million (U.S.) loss that analysts expected.

Cresco had no specific explanation for the higher loss. From the few details the company released, it appears that slightly worse margins, higher selling, general and administrative expenses, and much higher interest expenses were contributors. The company also incurred higher expenses in Q4 for what it called acquisition costs and expansion and rebranding costs.

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