Cronos drives Canadian pot stocks lower after quarterly miss

Aug. 09, 2022 1:30 PM ETCronos Group Inc. (CRON), CRON:CACGC, ACB, OGI, GRWG, HEXO, TLRYBy: Dulan Lokuwithana, SA News Editor4 Comments

Cannabis plant leaves and Canada flag

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  • Cronos Group (NASDAQ:CRON) led a selloff among marijuana companies, particularly Canadian stocks, on Tuesday after the Toronto-based Licensed Producer fell short of Street forecasts with its revenue for Q2 2022.
  • Cronos (CRON) shares have recorded the biggest intraday loss since November in reaction. Other notable decliners include its Canadian rivals Canopy Growth (CGC), Tilray (TLRY), Aurora Cannabis (ACB), OrganiGram Holdings (OGI), and HEXO Corp (HEXO). GrowGeneration (GRWG) is the lone U.S.-based cannabis operator to witness a sharp selloff.
  • Backed by a ~48% YoY growth in net revenue in Q2 2022, Cronos (CRON) reported a gross profit of ~$4.1M and narrowed the net loss by ~89%, partly due to a reduction in non-cash impairment loss on goodwill.
  • However, citing the restructuring and other cost-cutting measures as part of the ongoing strategic realignment, the company raised the outlook for expenses to ~$6.4M from the previous estimate of $5.8M.
  • Cannabis stocks witnessed an upsurge on Monday as Wall Street reacted to recent remarks made by Sen. Cory Booker regarding a potential compromise on marijuana legislation.

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