Cronos Group Inc. (CRON) reported that its first-quarter total sales rocketed 473% to $2.9 million versus last year’s $0.5 million. Sequentially, sales jumped by 83% from the fourth quarter of 2017 to $1.3 million in the first quarter of 2018.
The stock was rising by 4% in early trading to approximately $6.85 after beating analysts’ expectations for revenue of C$3.6 million or $2.8 million by today’s currency exchange according to Yahoo Finance. Three analysts had given their estimates for the quarter. Five analysts cover the Canadian stock and have an average target price of C$7.95 or $6.19.
Still, the company reported a net loss of $1 million versus last year’s net loss of $844,000. The net loss per share was one cent, the same last year’s net loss of one cent per share for the same time period. Cronos did report a gross profit of $1.9 million for the quarter, an improvement over the prior year’s $1 million.
“We are pleased that the strategic initiatives launched in 2017 are coming to fruition,” said Mike Gorenstein, CEO of Cronos Group. “2017 was a building block year which set the groundwork and foundation for the results achieved in the first quarter. Cronos is focused on continuing to increase capacity in order to serve existing distribution and newly established markets, developing intellectual property and launching recreational brands.”
The first quarter was punctuated with the company becoming the first licensed producer to list on the NASDAQ (NDAQ) exchange in February. The company now has a market capitalization of $1 billion, which isn’t too shabby for a company with current sales of less than $3 million a quarter.
Investors though are buying into the company’s future. The 28,000 square foot greenhouse at Peace Naturals is expected to deliver its first harvest in the second quarter of 2018. Plus, Peace Naturals was completely rebranded and received a dealers license from Health Canada. So, the company is expecting big things from this brand.
In addition to that, Cronos entered into a strategic joint venture with the U.S.’s MedMen to create MedMen Canada to create a Canadian branded retail chain.
Since the quarter ended, Cronos raised $100 million in gross proceeds through a bought deal offering n April.