Shares of Cronos Group (NASDAQ 🙂 (TSX 🙂 bounced back yesterday, regaining some of what they lost late last week when the Canadian-based cannabis grower reported its fourth quarter.
Despite exceeding analyst expectations by posting sales of US $ 17.05 million for the three-month period ended December 31, the company's share declined approximately 4.5% to close at $ 10.45 last Friday. It recovered yesterday to close out at $ 11.03, gaining 5.5% one day. Analysts had expected revenues to reach $ 13 million.
The investor ripple was a greater than expected loss of $ 75.2 million, including $ 15 million in inventory-related write-offs.
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However, write-downs were significantly lower than the same period last year, indicating that Cronos production is in line with demand.
Despite the loss, there was still a lot of positive in the quarterly report, especially when viewed over a longer term. The increase in revenues to reach the US $ 17.05 million mark represents an increase of more than 130% from the prior year. This was attributed to better sales in Canada for recreational cannabis, a push to the medical cannabis market in Israel and higher sales in the United States.
In fact, US sales improved by 30%, an impressive marker.
Building on the quarterly statistics, Cronos offered a clear direction where it would be headed in the longer term, with its marked increase in investments in edibles, its deepening in the Israeli market and a deal with Ulta Beauty (NASDAQ: ) to more aggressively market CBD-based health and beauty products.
"We are ready to build on the growth we experienced in 2020 as we continue to drive cannabinoid innovation and differentiated product offerings across our brand portfolio," said President and CEO Kurt Schmidt. “My goals this year will be to focus on building a winning team by fostering a collaborative, performance-oriented culture; continue to focus on creating disruptive technology and innovation; grow and develop our brands and strengthen our ability to compete through R&D, strategic global infrastructure and participation in the legislative process in key markets. "
As the US is poised to legalize cannabis at the federal level, provided the marijuana industry gets a boost, there was yet another indication last week of the industry's renewed bullish landscape when AdvisorShares launched its AdvisorShares Pure US Cannabis ETF (NYSE 🙂 reached a major milestone: crossing the $ 1 billion mark in assets under management. Launched in September 2020 with just $ 2.5 million in assets, MSOS was the first US-listed ETF targeting US-based cannabis companies, including multi-state operators.
"There is a lot of excitement around the cannabis investment room right now and for a variety of reasons," said Dan Ahrens, Chief Operating Officer of AdvisorShares and MSOS portfolio manager. "We firmly believe that the US cannabis market has to offer. An attractive long-term investment opportunity that stands out from other parts of the world."
In addition to MSOS, AdvisorShares also operates AdvisorShares Pure Cannabis (NYSE :), the first US-listed ETF dedicated to cannabis. It focuses on cannabis industry assets from around the world.
