Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) announced Thursday its 2020 second quarter business results.
Cronos Group, which operates as a cannabinoid company in the United States and internationally, reported net revenue of $9.9 million in Q2 2020 increased by $2.2 million from Q2 2019. The increase year-over-year was largely driven by sustained growth in the adult-use Canadian cannabis market, sales of which resulted from the launch of cannabis vaporizers in the Canadian market, including both adult-use and direct-to-consumer. And in addition, the inclusion of the Redwood acquisition in our financial results also helped drive sales, partially offset by non-recurring wholesale revenue in the Canadian market in Q2 2019.
“In the second quarter of 2020, we continued our progress despite unprecedented shifts in our industry and the global economy. We officially entered the Israeli medical cannabis market, with Cronos Israel commencing the sale of PEACE NATURALS™ branded dried flower products to medical patients. During these extraordinary times, it is very encouraging to see that we are making progress against our strategy across our global footprint,” said Mike Gorenstein, CEO of Cronos Group.
Cronos did report an operating loss of $34.8 million in Q2 2020, an increase by $18.0 million from Q2 2019. The change year-over-year was primarily driven by a decrease in gross profit, an increase in general and administrative expenses as a result of increased headcount, review costs and costs related to the Company’s responses to requests for information from various regulatory authorities related to the restatement of our 2019 interim financial statements totaling $3.5 million.
“While following safety guidelines, our employees are finding new and creative ways to keep our production, manufacturing, and R&D facilities operating, and we are bringing new products and brands to markets across the globe. Cronos Group was founded on the mission to improve people’s lives by unlocking the full potential of cannabis and our Company is very proud to be at the forefront of providing safe access and high-quality products to patients and consumers around the world,” the CEO explains.