Cannabis producer Cronos Group falls after outsourcing major losses, missing on sale (CRON)
Associated Press
- The Cunnos manufacturer produced disappointing sales when the losses were extended.
- Despite this, the shares were up almost 4% early on Thursday.
- Watch Cronos Group trade live.
The Cronos Group reported earnings for the first quarter on Thursday morning which lost sales expectations and showed that the loss was extended from a year ago. Despite the sales pitch, equities increased almost 4% in early trading, indicating that investors remain bullish on the sector.
The cannabis producer reported revenue of 6.5 million Canadian dollars, which is not below the 7 million Canadian dollars analysts surveyed Bloomberg expected. Its losses increased to $ 9 million from $ 1.5 million in the first quarter last year.
"In the first quarter of 2019, the business performed in line with our expectations," Mike Gorenstein CEO of Cronos Group . "We continue to be laser focused on our strategy of building our supply chain, distribution, intangible assets and branded portfolios."
The Cronos group also announced the implementation of several corporate transactions. These included the implementation of a $ 2.4 billion investment from the tobacco producer Altria.
The investment, which gives Altria 45% of the company and an opportunity to increase its stake to 55%, valued Cronos at 5.3 billion Canadian dollars ($ 4 billion).
"We are pleased to have completed the transaction with Altria officially and to disconnect a relationship we expect to bring about significant growth and value creation," Gorenstein added. "Altria's investment and the services Altria will deliver to the Cronos Group will increase our financial resources and allow us to expand our product development and commercialization."
Cronos Group was up 48% this year through Wednesday.
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