The Canadian cannabis company Cronos Group Inc (NASDAQ:CRON, TSX:CRON) reported a sharp rise in its revenue and net income for the second quarter from last year, thanks to a jump in prices and demand for its cannabis oil.
In the second quarter, revenue climbed to C$3.4mln, a five-fold increase from the C$0.6mln the company posted in the year-ago period. Its net income also swung higher to C$723,000, up from C$174,000 in the same quarter last year.
Cannabis oil sales comprised 40% of its medical marijuana sales across Canada in the quarter.
Read: Cronos unveils cross-border joint venture with MedMen to develop branded products, open stores across Canada
“This quarter is about setting the stage and establishing Cronos Group’s strategy for future growth,” said CEO Mike Gorenstein in a statement.
"We pushed the business forward while achieving great milestones for the company and this is only the beginning," he added.
In the quarter, Cronos’s Australian division was granted a medicinal cannabis Manufacture License by the Australian Office of Drug Control, which permits the manufacturing of cannabinoid-based products in Australia.
Rolling up joint ventures
The Toronto-based company also entered into a strategic distribution partnership with Delfarma, a Polish pharmaceutical wholesaler with a distribution network of over 5,000 pharmacies. Under the deal’s terms, Cronos will supply its Peace Naturals branded cannabis products to Delfarma for distribution across Poland.
Cronos is also preparing for Canada’s recreational cannabis market with the launch of its first premium brand COVE, a high-grade form of marijuana which is hand-trimmed and comes from the Okanagan Valley in British Columbia.
Cronos’s other recent advances include a 50/50 joint venture with a group of investors led by Bert Mucci, a Canadian greenhouse operator. Under the new partnership called Cronos Growing Company, a greenhouse will be built for cannabis production on 100 acres of land in Kingsville, Ontario. Once the greenhouse is up and running, it is likely to produce up to 70,000 kilograms of cannabis yearly.
Read: Cronos shares slump due to first-quarter loss
Cronos has also entered into a five-year supply agreement with Cura Cannabis Solutions, one of the world’s biggest cannabis companies.
Last May, the trading of Cronos Group’s common shares, which trade under the symbol CRON and are also listed in the US on Nasdaq, were uplisted from the TSX Venture Exchange to the Toronto Stock Exchange.
Cronos is a cannabis company that operates within Health Canada’s Access to Cannabis for Medical Purposes Regulations and distributes globally. It has production and distribution platforms in Germany, Poland, Israel and Australia.
Cronos Group shares trading on the Nasdaq were flat at US$5.88 in pre-market trade.
Contact Ellen Kelleher at ellen@proactiveinvestors.com