Cronos Group’s (NASDAQ: CRON) (TSX: CRON) decision to delay its earnings release makes it the latest cannabis company to unsettle the market just as it is trying to crawl out of a bear market. On Monday the company stated it would delay its 2019 fourth quarter and full-year earnings release and conference call, previously scheduled for Thursday, February 27, 2020. According to the company statement, Cronos “has had a delay in the completion of its financial statements and will make a further announcement in a subsequent press release to schedule the date and time of the earnings conference call.”
This follows one month after the company’s Chief Operating Officer David Hsu resigned from his position and no successor was named. Hsu had joined the company in 2016 and oversaw all of Cronos Group’s operations including construction, cultivation, and manufacturing as Chief Operating Officer. Prior to joining Cronos Group, David spent over ten years consulting with Deloitte and CRG Partners, a premier turnaround consulting firm, where he operated and managed distressed companies with revenues of more than $500.
The stock has taken a tumble along with most cannabis stocks over the past year. Cronos’ 52-week high was C$32 and the low was $7. The stock was lately trading at C$9.44 and seemed to be slowly building its way back up the charts.
Last Quarter Was Good
If Cronos is signaling that this quarter’s numbers will be disappointing, it will surprise investors. Last November, the company reported that its third-quarter net revenue increased 238% in Canadian dollars to $12.7 million versus last year’s $3.8 million for the same time period. Cronos attributed the gain to the launch of the adult-use market in Canada and the inclusion of Redwood from the date of closing on September 5, 2019, to the end of the quarter. Sequentially, net revenue rose 24% from $10.2 million in the second quarter as the company said that improvement was due to increased sales in domestic dried cannabis and the inclusion of Redwood.
Overall figures form Canada point to a strong end of 2019. Statistics Canada data showed cannabis sales in December climbed 8.1% sequentially to $146 million. This was the third straight month in a row sales have increased with the biggest increases coming from Ontario, Quebec and Alberta.