Cronos Group Could Survive the COVID-19 Storm
The struggles faced by the cannabis industry are plentiful -- lower-than-expected revenue, rising black-market competition, regulatory scandals. Now with the COVID-19 pandemic, few cannabis companies seem capable of surviving the crisis to continue growing. I feel Cronos Group (NASDAQ: CRON) is one that can.
True, Cronos might not yet have seen a drastic increase in revenue or positive EBITDA (earnings before interest, taxes, depreciation, and amortization). But it has managed to stay afloat amid the struggles of the cannabis sector and the market as a whole. Let's dive into its first-quarter results, reported May 8, to understand how it is planning to survive the crisis.
The marijuana industry had been suffering from declining revenue for a while before the pandemic, but COVID-19 has actually proved beneficial for the sector -- once marijuana was deemed an essential item in Canada and most U.S. states where it is legal, sales increased. Cronos wasn't the only cannabis company to see an increase in revenue in the most recent quarter -- 75.1% year-over-year growth, to be specific, for a total of 11.3 million Canadian dollars. That was also up from CA$9.6 million in the fourth quarter of fiscal 2019.
Source Fool.com
