Cronos Group Reports 2021 Second Quarter Results

 

  Amended agreement with Ginkgo Bioworks to accelerate commercialization of cultured cannabinoids  

 

  Announced strategic investment in PharmaCann, a leading U.S. cannabis company  

 

  Spinach™ launched new products in the edible, concentrate, and flower categories in Canada  

 

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) ("Cronos Group" or the "Company"), today announces its 2021 Second Quarter business results.

 

"This quarter, Cronos Group continued to bring high-quality and insight-driven products to market. I am particularly proud of the Spinach™ brand gummy innovation launched this quarter into the Canadian adult-use market, SOURZ by Spinach™, which has quickly jumped to be one of the most desirable products in the edibles category. In the U.S., we officially re-launched PEACE+™ in the direct-to-consumer channel, which rounds out our different pricing tiers for the U.S. hemp-derived CBD market. Having brands across price points and usage occasions is critical to meeting consumer needs in the CBD category," said Kurt Schmidt, President and CEO, Cronos Group.

 

"Our U.S. growth strategy focuses on delivering long-term shareholder value by assembling a best-in-class brand and intellectual property portfolio and positioning to deploy our products in the U.S. market through investments and opportunities with companies that share our vision and commitment to responsibly distributing disruptive cannabinoid products that improve people's lives. In the second quarter of 2021, we were able to lock in a component of that strategy as we made a strategic investment in PharmaCann, a leading vertically integrated U.S. cannabis company. We look forward to capitalizing on opportunities in the U.S. that we expect will strengthen our ability to compete in this emerging market."

 

   Financial Results   

 
                                                                                                                                                                                                                                                                                                                                                                                                                         
(in thousands of U.S. dollars)    Three months ended June 30,     Change     Six months ended June 30,     Change  
    2021     2020     $     %     2021     2020     $     %  
Net revenue                 
United States   $ 2,227     $ 2,174     $ 53     2   %   $ 4,668     $ 4,350     $ 318     7   %
Rest of World   13,395     7,709     5,686     74   %   23,565     13,965     9,600     69   %
Consolidated net revenue   15,622     9,883     5,739     58   %   28,233     18,315     9,918     54   %
                 
Gross loss   $ (15,784 )    $ (2,922 )    $ (12,862 )    440   %   $ (18,747 )    $ (9,398 )    $ (9,349 )    99   %
Gross margin   (101 ) %   (30 ) %   N/A   (71 ) pp   (66 ) %   (51 ) %   N/A   (15 ) pp
                 
Adjusted EBITDA ( i )   $ (49,759 )    $ (26,986 )    $ (22,773 )    84   %   $ (86,333 )    $ (64,041 )    $ (22,292 )    35   %
                 
  Other Data                  
Cash and cash equivalents (ii)   $ 895,181     $ 1,109,700     $ (214,519 )    (19 ) %         
Short-term investments (ii)   201,699     213,614     (11,915 )    (6 ) %         
Capital expenditures   2,118     8,582     (6,464 )    (75 ) %   9,190     16,098     (6,908 )    (43 ) %
 

  (   i   )  See "Non-GAAP Measures" for more information, including a reconciliation of adjusted earnings (loss) before interest, taxes, depreciation and amortization ("Adjusted EBITDA")  
(ii)  Dollar amo   unts are as of the last day of the period indicated  

 

  Second Quarter   2021  

 
  • Net revenue of $15.6 million in Q2 2021 increased by $5.7 million from Q2 2020. The increase year-over-year was primarily driven by continued growth in the adult-use Canadian cannabis market and increased sales in the Israeli medical cannabis market.
  •  
  • Gross loss of $15.8 million in Q2 2021 increased by $12.9 million from Q2 2020. The increase in losses year-over-year was primarily driven by an increase in inventory write-downs in the ROW segment, which totaled $12.0 million in Q2 2021, representing an increase of $8.9 million from Q2 2020, the impact of strategic price reductions on various adult-use cannabis products in Canada taken in the second half of 2020, as well as start-up costs associated with new product development in the Rest of World ("ROW") segment.
  •  
  • Adjusted EBITDA loss of $49.8 million in Q2 2021 increased by $22.8 million from Q2 2020. The increase in losses year-over-year was primarily driven by an increase in gross loss as described above, an increase in sales and marketing costs due to brand development in the U.S. segment, and an increase in research and development ("R&D") costs driven by increased spending on product development and developing cannabinoid intellectual property in the ROW segment.
  •  
  • Capital expenditures of $2.1 million in Q2 2021 decreased by $6.5 million from Q2 2020. The decrease year-over-year was primarily driven by a reduction in construction costs in the ROW segment and a decrease in costs related to the Company's enterprise resource planning system.
  •  

   Business Updates   

 

  Transactions  

 

In June 2021, Cronos Group announced a strategic investment (the "PharmaCann Investment") in PharmaCann Inc. ("PharmaCann"), a leading vertically integrated U.S. cannabis company. A wholly owned subsidiary of Cronos Group purchased an option (the "PharmaCann Option") to acquire an approximately 10.5% ownership stake in PharmaCann on a fully-diluted basis for a total consideration of approximately $110.4 million. PharmaCann has a broad geographic footprint in the U.S. and has built an efficient, effective and scalable operating model, including six production facilities and 24 dispensaries operating under the Verilife™ brand across the following six limited license states: New York, Illinois, Ohio, Maryland, Pennsylvania, and Massachusetts. PharmaCann continues to invest in its manufacturing infrastructure and brand development to capitalize on the significant consumer retail and business-to-business wholesale opportunities. Following the exercise of the PharmaCann Option (which will be based upon various factors, including the status of U.S. federal cannabis legalization), Cronos Group and PharmaCann will enter into commercial agreements that would permit each party to offer its products through either party's distribution channels.

 

  Brand and Product Portfolio  

 

In June 2021, Cronos Group launched SOURZ by Spinach™, an exciting new line of cannabis gummies with bold and unique dual flavor combinations, into the Canadian adult-use market. SOURZ by Spinach™ delivers bold fruit flavors in a distinctive "S" shape with a proprietary coating designed to provide a sour and sweet flavor profile, differentiating the product and elevating the consumer experience. SOURZ by Spinach™ has quickly risen to being one of the top performing brands in the edibles category. According to Hifyre™ data, SOURZ by Spinach™ has achieved a double-digit market share in the edibles category during the July and August-to-date period. OCS Data for Ontario sales to retailers reports all three of the SOURZ by Spinach™ stock keeping units ("SKU") ranking in the top-10 of the edible category, during the 4 weeks ending August 1, 2021.

 

In June 2021, Cronos Group launched Spinach™ DABZ, a new line of cannabis concentrates into the Canadian adult-use market. Spinach™ DABZ are 100% cannabis-derived with no color remediation or additives to preserve terpenes and full spectrum cannabinoids. Broadening the reach of Cronos Group's Spinach™ brand into new and emerging categories with differentiated products will continue to be the key driver of innovation initiatives.

 

During the second quarter of 2021, the Spinach™ brand also launched a 28-gram format for Spinach™ flower, Spinach™ Nuggetz, and a new flower SKU, Spinach™ GMO Cookies, in select markets in Canada.

 

In June 2021, the Company officially re-launched PEACE+™, Cronos Group's U.S. hemp-derived CBD offering that is positioned in the mainstream market through its direct-to-consumer website, peaceplus.com . PEACE+™'s initial product portfolio consists of four tinctures. The Company intends to expand the product portfolio over time with innovative U.S. hemp-derived CBD products.

 

Subsequent to the end of the second quarter of 2021, in July 2021, Happy Dance™ launched a new facial skin care product, Look Alive CBD Face Moisturizer. This moisturizer has a whipped, light texture and is packed with hydrating ingredients such as avocado oil, hyaluronic acid and high-quality U.S. hemp-derived CBD. The product is now available online to U.S. consumers through the brand's direct-to-consumer website, doahappydance.com , and online at ULTA.com and is expected to become available in ULTA Beauty™ stores throughout the U.S. in the coming weeks.

 

  Intellectual Property Initiatives  

 

In June 2021, Cronos Group and Ginkgo Bioworks, Inc. ("Ginkgo") announced an amended collaboration and license agreement that will enable the companies to accelerate the commercialization of cultured cannabinoids at scale. The amended agreement follows the receipt of Cronos Fermentation's processing license in April 2021, and most recently the receipt of its license issued by the Canada Revenue Agency. With the amended agreement and both licenses in hand, Cronos Fermentation commenced commercial-scale production of cannabigerol ("CBG") in June 2021. Cronos Group is prioritizing rare cannabinoids, such as CBG, and plans to sequence commercial production and subsequent product launches based on this approach. Cronos Group expects that the final productivity target for CBG will be achieved prior to September 2021, as previously announced.

 

  Appointments  

 

Kendrick Ashton Jr. was elected to Cronos Group's Board of Directors at the Annual Meeting of Shareholders held on June 25, 2021. Mr. Ashton is the Co-Founder and Co-Chief Executive Officer of The St. James, a leading developer and operator of performance, wellness and lifestyle brands, experiences and destinations. Prior to founding The St. James in 2014, Mr. Ashton was a founding member and Managing Director of Perella Weinberg Partners, a boutique financial services firm founded in 2006. Prior to joining Perella Weinberg Partners, Mr. Ashton was an investment banker at Goldman, Sachs & Co. and gained legal experience at Cravath, Swaine & Moore LLP and Wachtell, Lipton, Rosen & Katz. Mr. Ashton is a member of the Board of Trustees of the Colonial Williamsburg Foundation, the Board of Trustees of the National Urban League, the Board of Directors of Archbishop John Carroll High School and the Board of Directors of Bellwether Education Partners and is an emeritus member of the Board of Visitors and Foundation Board of the College of William & Mary.

 

In April 2021, Thomas Cohn joined Cronos Group as Head of Regulatory and Product. Mr. Cohn joined Cronos Group from The Avon Company, where he served as General Counsel and Corporate Secretary. Mr. Cohn also served as Deputy General Counsel, Regulatory at NBTY, Inc., a leading vertically integrated manufacturer, marketer and distributor of nutritional supplements with global operations. Prior to his time at NBTY, Inc., Mr. Cohn served in various roles at the Federal Trade Commission ("FTC") from 1991 to 2008, including as Director and Assistant Director of its Northeast Region, where he was responsible for managing antitrust and consumer protection investigations and law enforcement actions, as well as local and regional outreach efforts to educate consumers, businesses, and law enforcement agencies on fraud identification and avoidance, and how to comply with antitrust and consumer protection laws enforced by the FTC.

 

In July 2021, Anthony Parisi joined Cronos Group as Global Head of Audit, a newly formed role for the Company. Mr. Parisi joins Cronos Group with over 20 years of audit experience, most recently serving as Vice President of Global Audit and Risk Management for Reliance Worldwide Corporation, an ASX listed company.

 

In June 2021, Carlos Cortez joined Cronos Group as Vice President & Controller, a role which includes serving as the Company's principal accounting officer. Mr. Cortez joins Cronos Group with over 18 years of experience, most recently serving as Corporate Controller of SharpSpring, Inc., a publicly traded cloud-based marketing technology company. Prior to his time at SharpSpring, Inc., Mr. Cortez was the Senior Finance Director – Record to Report for Discovery, Inc., a publicly traded global media company, from August 2019 until December 2020. Prior to his time at Discovery, Inc., Mr. Cortez spent five years as Corporate Controller for Malibu Boats, Inc., a publicly traded manufacturer of recreational powerboats.

 

   Rest of World Results   

 

Cronos Group's Rest of World reporting segment includes results of the Company's operations for all markets outside of the U.S.

 
                                                                                                                                                                                                                                                                                                     
(in thousands of U.S. dollars)    Three months ended June 30,     Change     Six months ended June 30,     Change  
    2021     2020     $     %     2021     2020     $     %  
Cannabis flower   $ 11,597     $ 5,674     $ 5,923     104   %   $ 21,031     $ 8,415     $ 12,616     150   %
Cannabis extracts   1,531     1,917     (386 )    (20 ) %   2,234     5,317     (3,083 )    (58 ) %
Other   267     118     149     126   %   300     233     67     29   %
Net revenue   13,395     7,709     5,686     74   %   23,565     13,965     9,600     69   %
         
Gross loss   $ (16,428 )    $ (3,509 )    $ (12,919 )    368   %   $ (20,567 )    $ (11,067 )    $ (9,500 )    86   %
Gross margin   (123 ) %   (46 ) %   N/A   (77 ) pp   (87 ) %   (79 ) %   N/A   (8 ) pp
             
Adjusted EBITDA ( i )   $ (32,605 )    $ (18,618 )    $ (13,987 )    75   %   $ (54,789 )    $ (47,628 )    $ (7,161 )    15   %
 

  ( i ) See "Non-GAAP Measures" for more information, including a   reconciliation of Adjusted EBITDA  

 

  Second Quarter 2021  

 
  • Net revenue of $13.4 million in Q2 2021 increased by $5.7 million from Q2 2020. The increase year-over-year was primarily driven by continued growth in the adult-use cannabis flower market in Canada and sales in the Israeli medical cannabis market.
  •  
  • Gross loss of $16.4 million in Q2 2021 increased by $12.9 million from Q2 2020. The increase in losses year-over-year was primarily driven by an increase in inventory write-downs which totaled $12.0 million in Q2 2021 representing an increase of $8.9 million from Q2 2020, the impact of strategic price reductions on various adult-use cannabis products in Canada taken in the second half of 2020, and start-up costs associated with new product development.
  •  
  • Adjusted EBITDA loss of $32.6 million in Q2 2021 increased by $14.0 million from Q2 2020. The increase in losses year-over-year was primarily driven by an increase in gross loss as described above, and an increase in R&D costs driven by increased spending on product development and developing cannabinoid intellectual property.

  •  

   United States Results   

 

Cronos Group's U.S. reporting segment includes results of the Company's operations for all brands and products in the U.S.

 
                                                                                                                                                                                                      
(in thousands of U.S. dollars)    Three months ended June 30,     Change     Six months ended June 30,     Change  
    2021     2020     $     %     2021     2020     $     %  
Net revenue   $ 2,227     $ 2,174     $ 53     2 %   $ 4,668     $ 4,350     $ 318     7 %
                 
Gross profit   $ 644     $ 587     $ 57     10 %   $ 1,820     $ 1,669     $ 151     9 %
Gross margin   29   %   27   %   N/A   2 pp   39   %   38   %   N/A   1 pp
                 
Adjusted EBITDA ( i )   $ (10,711 )    $ (4,785 )    $ (5,926 )    124 %   $ (20,221 )    $ (10,567 )    $ (9,654 )    91 %
 

  ( i ) See "Non-GAAP Measures" for more information, including a   reconciliation of Adjusted EBITDA.  

 

  Second Quarter 2021  

 
  • Net revenue of $2.2 million in Q2 2021 essentially unchanged from Q2 2020.
  •  
  • Gross profit of $0.6 million in Q2 2021 essentially unchanged from Q2 2020.
  •  
  • Adjusted EBITDA loss of $10.7 million in Q2 2021 increased by $5.9 million from Q2 2020. The increase in losses year-over-year was primarily driven by an increase in sales and marketing costs related to brand development.

  •  

   Conference Call   

 

The Company will host a conference call and live audio webcast on Friday, August 6, 2021, at 8:30 a.m. EDT to discuss 2021 Second Quarter business results. The call will last approximately one hour. An audio replay of the call will be archived on the Company's website for replay. Instructions for the conference call are provided below:

 

  About Cronos Group  

 

Cronos Group is an innovative global cannabinoid company with international production and distribution across five continents. Cronos Group is committed to building disruptive intellectual property by advancing cannabis research, technology and product development. With a passion to responsibly elevate the consumer experience, Cronos Group is building an iconic brand portfolio. Cronos Group's portfolio includes PEACE NATURALS ™, a global wellness platform, two adult-use brands, COVE ™ and Spinach ™, and three U.S. hemp-derived CBD brands, Lord Jones ™, Happy Dance ™ and PEACE+ ™. For more information about Cronos Group and its brands, please visit: thecronosgroup.com .

 

  Forward-looking Statements  

 

This press release may contain information that may constitute forward-looking information and forward-looking statements within the meaning of applicable securities laws (collectively, "Forward-Looking Statements"), which are based upon our current internal expectations, estimates, projections, assumptions and beliefs. All information that is not clearly historical in nature may constitute Forward-Looking Statements. In some cases, Forward-Looking Statements can be identified by the use of forward-looking terminology such as "expect", "likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, expressions and phrases, including negative and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussion of strategy. Forward-Looking Statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of historical fact.

 

Forward-Looking Statements include, but are not limited to, statements with respect to:

 
  • the uncertainties associated with the COVID-19 pandemic, including our ability, and the abilities of our joint ventures and our suppliers and distributors, to effectively deal with the restrictions, limitations and health issues presented by the COVID-19 pandemic, the ability to continue our production, distribution and sale of our products, and demand for and the use of our products by consumers;
  •  
  • laws and regulations and any amendments thereto applicable to our business and the impact thereof, including uncertainty regarding the application of United States ("U.S.") state and federal law to U.S. hemp (including CBD) products and the scope of any regulations by the U.S. Food and Drug Administration, the U.S. Drug Enforcement Administration, the U.S. Federal Trade Commission, the U.S. Patent and Trademark Office (the "PTO") and any state equivalent regulatory agencies over U.S. hemp (including CBD) products;
  •  
  • the laws and regulations and any amendments thereto relating to the U.S. hemp industry in the U.S., including the promulgation of regulations for the U.S. hemp industry by the U.S. Department of Agriculture and relevant state regulatory authorities;
  •  
  • the grant, renewal and impact of any license or supplemental license to conduct activities with cannabis or any amendments thereof;
  •  
  • our international activities and joint venture interests, including required regulatory approvals and licensing, anticipated costs and timing, and expected impact;
  •  
  • our ability to successfully create and launch brands and further create, launch and scale U.S. hemp-derived consumer products, and cannabis products;
  •  
  • the benefits, viability, safety, efficacy, dosing and social acceptance of cannabis including CBD and other cannabinoids;
  •  
  • expectations regarding the implementation and effectiveness of key personnel changes;
  •  
  • the anticipated benefits and impact of the Altria Group Inc.'s investment in the Company (the "Altria Investment"), pursuant to a subscription agreement dated December 7, 2018;
  •  
  • the potential exercise of one warrant of the Company included as part of the Altria Investment, pre-emptive rights and/or top-up rights in connection with the Altria Investment, including proceeds to us that may result therefrom;
  •  
  • expectations regarding the use of proceeds of equity financings, including the proceeds from the Altria Investment;
  •  
  • the legalization of the use of cannabis for medical or adult-use in jurisdictions outside of Canada, the related timing and impact thereof and our intentions to participate in such markets, if and when such use is legalized;
  •  
  • expectations regarding the potential success of, and the costs and benefits associated with, our joint ventures, strategic alliances and equity investments, including the strategic partnership with Ginkgo;
  •  
  • our ability to execute on our strategy and the anticipated benefits of such strategy;
  •  
  • expectations of the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;
  •  
  • the ongoing impact of the legalization of additional cannabis product types and forms for adult-use in Canada, including federal, provincial, territorial and municipal regulations pertaining thereto, the related timing and impact thereof and our intentions to participate in such markets;
  •  
  • the future performance of our business and operations;
  •  
  • our competitive advantages and business strategies;
  •  
  • the competitive conditions of the industry;
  •  
  • the expected growth in the number of customers using our products;
  •  
  • our ability or plans to identify, develop, commercialize or expand our technology and R&D initiatives in cannabinoids, or the success thereof;
  •  
  • expectations regarding acquisitions and dispositions and the anticipated benefits therefrom, including the proposed sale of our Original B.C. Ltd. ("OGBC") production facility;
  •  
  • uncertainties as to our ability to exercise the PharmaCann Option (as defined herein) in the near term or the future or in full or in part, including the uncertainties as to the status and future development of federal legalization of cannabis in the U.S. and our ability to realize the anticipated benefits of the transaction with PharmaCann (as defined herein);
  •  
  • expectations regarding revenues, expenses and anticipated cash needs;
  •  
  • expectations regarding cash flow, liquidity and sources of funding;
  •  
  • expectations regarding capital expenditures;
  •  
  • the expansion of our production and manufacturing, the costs and timing associated therewith and the receipt of applicable production and sale licenses;
  •  
  • the expected growth in our growing, production and supply chain capacities;
  •  
  • expectations regarding the resolution of litigation and other legal and regulatory proceedings, reviews and investigations;
  •  
  • expectations with respect to future production costs;
  •  
  • expectations with respect to future sales and distribution channels and networks;
  •  
  • the expected methods to be used to distribute and sell our products;
  •  
  • the anticipated future gross margins of our operations;
  •  
  • accounting standards and estimates;
  •  
  • our ability to timely and effectively remediate any material weaknesses in our internal control over financial reporting; and
  •  
  • expectations regarding the costs and benefits associated with our contracts and agreements with third parties, including under our third-party supply and manufacturing agreements.
  •  

Certain of the Forward-Looking Statements contained herein concerning the industries in which we conduct our business are based on estimates prepared by us using data from publicly available governmental sources, market research, industry analysis and on assumptions based on data and knowledge of these industries, which we believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. The industries in which we conduct our business involve risks and uncertainties that are subject to change based on various factors, which are described further below.

 

The Forward-Looking Statements contained herein are based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including: (i) our ability, and the abilities of our joint ventures and our suppliers and distributors, to effectively deal with the restrictions, limitations and health issues presented by the COVID-19 pandemic and the ability to continue our production, distribution and sale of our products and customer demand for and use of our products; (ii) management's perceptions of historical trends, current conditions and expected future developments; (iii) our ability to generate cash flow from operations; (iv) general economic, financial market, regulatory and political conditions in which we operate; (v) the production and manufacturing capabilities and output from our facilities and our joint ventures, strategic alliances and equity investments; (vi) consumer interest in our products; (vii) competition; (viii) anticipated and unanticipated costs; (ix) government regulation of our activities and products including but not limited to the areas of taxation and environmental protection; (x) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses; (xi) our ability to obtain qualified staff, equipment and services in a timely and cost-efficient manner; (xii) our ability to conduct operations in a safe, efficient and effective manner; (xiii) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our recent acquisitions into our existing operations; (xiv) our ability to complete planned dispositions, including the sale of OGBC, and, if completed, obtain our anticipated sales price; (xv) our ability to exercise the PharmaCann Option and realize the anticipated benefits of the transaction with PharmaCann; and (xvi) other considerations that management believes to be appropriate in the circumstances. While our management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct.

 

By their nature, Forward-Looking Statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the Forward-Looking Statements in this press release and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf. Such factors include, without limitation, the risk that the COVID-19 pandemic may disrupt our operations and those of our suppliers and distribution channels and negatively impact the demand for and use of our products; the risk that cost savings and any other synergies from the Altria Investment may not be fully realized or may take longer to realize than expected; the risk that we will not complete planned dispositions, including the sale of OGBC, or, if completed, obtain our anticipated sales price; the implementation and effectiveness of key personnel changes; future levels of revenues; consumer demand for cannabis and U.S. hemp products; our ability to manage disruptions in credit markets or changes to our credit ratings; future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses; the success or timing of completion of ongoing or anticipated capital or maintenance projects; business strategies, growth opportunities and expected investment; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan (either within the expected timeframe or at all); the potential effects of judicial, regulatory or other proceedings, or threatened litigation or proceedings, on our business, financial condition, results of operations and cash flows; volatility in and/or degradation of general economic, market, industry or business conditions; compliance with applicable environmental, economic, health and safety, energy and other policies and regulations and in particular health concerns with respect to vaping and the use of cannabis and U.S. hemp products in vaping devices; the anticipated effects of actions of third parties such as competitors, activist investors or federal (including U.S. federal), state, provincial, territorial or local regulatory authorities or self-regulatory organizations, changes in regulatory requirements in relation to our business and products; legal or regulatory obstacles that could prevent us from being able to exercise the PharmaCann Option and thereby realizing the anticipated benefits of the transaction with PharmaCann; and the factors discussed under Part I, Item 1A, "Risk Factors" of the Annual Report. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on Forward-Looking Statements.

 

Forward-Looking Statements are provided for the purposes of assisting the reader in understanding our financial performance, financial position and cash flows as of and for periods ended on certain dates and to present information about management's current expectations and plans relating to the future, and the reader is cautioned that the Forward-Looking Statements may not be appropriate for any other purpose. While we believe that the assumptions and expectations reflected in the Forward-Looking Statements are reasonable based on information currently available to management, there is no assurance that such assumptions and expectations will prove to have been correct. Forward-Looking Statements are made as of the date they are made and are based on the beliefs, estimates, expectations and opinions of management on that date. We undertake no obligation to update or revise any Forward-Looking Statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such Forward-Looking Statements. The Forward-Looking Statements contained in this press release and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf are expressly qualified in their entirety by these cautionary statements.

 

As used in this press release, "CBD" means cannabidiol and "U.S. hemp" has the meaning given to the term "hemp" in the U.S. Agricultural Improvement Act of 2018, including hemp-derived CBD.

 

 

 

 Cronos Group Inc.
  Condensed Consolidated Balance Sheets
  (In thousands of U.S. dollars, except share amounts)

 

 
                                                                                                                                                                                                                                                  
   As of June 30, 2021     As of December 31, 2020  
  Assets    (Unaudited)     (Audited)  
Current assets    
Cash and cash equivalents $ 895,181    $ 1,078,023  
Short-term investments 201,699    211,766  
Accounts receivable, net 11,299    8,928  
Other receivables 2,468    10,033  
Current portion of loans receivable, net 5,028    7,083  
Prepaids and other current assets 10,153    11,161  
Inventory, net 35,605    44,002  
Held-for-sale assets 645    1,176  
Total current assets 1,162,078    1,372,172  
Advances to joint ventures 499    467  
Investments in equity accounted investees, net 20,970    19,235  
Other investments 110,392    
Loan receivable, net 94,113    87,191  
Property, plant and equipment, net 193,920    187,599  
Right-of-use assets 6,687    9,776  
Intangible assets, net 70,409    69,720  
Goodwill 179,543    179,522  
  Total assets   $ 1,838,611    $ 1,925,682  
    
  Liabilities     
Current liabilities    
Accounts payable and other liabilities $ 29,829    $ 42,102  
Current portion of lease obligation 1,206    1,322  
Derivative liabilities 169,563    163,410  
Total current liabilities 200,598    206,834  
Due to non-controlling interests 1,768    2,188  
Lease obligation 6,333    8,492  
  Total liabilities   208,699    217,514  
Commitments and contingencies    
    
  Shareholders' equity     
Share capital 572,858    569,260  
Additional paid-in capital 32,368    34,596  
Retained earnings 955,721    1,064,509  
Accumulated other comprehensive income 71,729    42,999  
Total equity attributable to shareholders of Cronos Group 1,632,676    1,711,364  
Non-controlling interests (2,764 )   (3,196 )
  Total shareholders' equity   1,629,912    1,708,168  
  Total liabilities and shareholders' equity   $ 1,838,611    $ 1,925,682  
 

 

 

 


 

  Cronos Group Inc.  
Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)  
(In thousands of U.S. dollars, except share amounts, unaudited)  

 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
   Three months ended June 30,     Six months ended June 30,  
   2021     2020     2021     2020  
  Net revenue, before excise taxes   $ 18,848    $ 11,432    $ 33,502    $ 20,776  
Excise taxes (3,226 )   (1,549 )   (5,269 )   (2,461 )
  Net revenue   15,622    9,883    28,233    18,315  
Cost of sales 19,445    9,743    35,019    16,689  
Inventory write-down 11,961    3,062    11,961    11,024  
Gross loss (15,784 )   (2,922 )   (18,747 )   (9,398 )
  Operating expenses         
Sales and marketing 13,209    6,501    23,463    13,613  
Research and development ("R&D") 5,199    3,631    10,301    8,221  
General and administrative 22,417    18,429    44,323    42,188  
Share-based payments 2,565    2,546    5,064    4,982  
Depreciation and amortization 1,043    679    1,778    1,366  
Total operating expenses 44,433    31,786    84,929    70,370  
Operating loss (60,217 )   (34,708 )   (103,676 )   (79,768 )
  Other income (loss)         
Interest income, net 2,293    3,734    4,622    11,485  
Gain (loss) on revaluation of derivative liabilities 115,248    (35,880 )   (1,626 )   77,488  
Impairment loss on long-lived assets    (40,000 )   (1,741 )   (40,000 )
Share of loss from equity accounted investments (1,115 )   (794 )   (2,758 )   (1,966 )
Other, net 1,127    (9 )   911    785  
Total other income (loss) 117,553    (72,949 )   (592 )   47,792  
Income (loss) from continuing operations 57,336    (107,657 )   (104,268 )   (31,976 )
            
            
            
Loss from discontinued operations (561 )   (46 )   (582 )   (46 )
Net income (loss) 56,775    (107,703 )   (104,850 )   (32,022 )
Net loss attributable to non-controlling interest (279 )   (726 )   (592 )   (1,085 )
Net income (loss) attributable to Cronos Group $ 57,054    $ (106,977 )   $ (104,258 )   $ (30,937 )
  Other comprehensive income (loss)         
Net income (loss) $ 56,775    $ (107,703 )   $ (104,850 )   $ (32,022 )
Other comprehensive income (loss):        
Foreign exchange gain (loss) on translation 13,470    51,871    29,754    (61,821 )
Total other comprehensive income (loss) 13,470    51,871    29,754    (61,821 )
Comprehensive income (loss) 70,245    (55,832 )   (75,096 )   (93,843 )
Less: comprehensive income (loss) attributable to non-controlling interests (394 )   (762 )   432    (1,098 )
  Comprehensive income (loss) attributable to Cronos
Group
 
$ 70,639    $ (55,070 )   $ (75,528 )   $ (92,745 )
  Net income (loss) per share         
Basic and diluted - continuing operations $ 0.15    $ (0.31 )   $ (0.28 )   $ (0.09 )
  Weighted average number of outstanding shares         
Basic 371,721,382    349,075,408    367,391,118    348,946,439  
Diluted 375,349,856    349,075,408    367,391,118    348,946,439  
 

 

 

  Cronos Group Inc.
  Condensed Consolidated Statements of Cash Flows  
(In thousands of U.S. dollars, except share amounts, unaudited)  

 
                                                                                                                                                                                                                                                
   Six months ended June 30,  
   2021     2020  
  Operating activities     
Net loss $ (104,850 )   $ (32,022 )
Adjustments to reconcile net loss to cash provided by operating activities:    
Share-based payments 5,064    4,982  
Depreciation and amortization 5,083    2,879  
Share of loss from investments in equity accounted investees 2,758    1,966  
Gain (loss) on revaluation of derivative liabilities 1,626    (77,488 )
Impairment loss on long-lived assets 1,741    40,000  
Expected credit losses on long-term financial assets    1,357  
Other non-cash operating activities, net (1,192 )   599  
Changes in operating assets and liabilities:    
Accounts receivable, net (2,194 )   2,895  
Other receivables 6,960    (3,047 )
Prepaids and other current assets 1,268    1,187  
Inventory, net (1,010 )   (24,292 )
Inventory write-down 11,961    11,024  
Accounts payable and other liabilities (13,412 )   (8,417 )
Cash flows used in operating activities (86,197 )   (78,377 )
  Investing activities     
Purchase of short-term investments (120,180 )   (200,173 )
Proceeds from short-term investments 136,204    279,275  
Purchase of other investments (110,392 )   
Purchase of property, plant and equipment (8,347 )   (13,344 )
Purchase of intangible assets (843 )   (2,754 )
Proceeds from sale of held-for-sale assets 2,059    
Advances on loans receivable (5,064 )   (23,974 )
Proceeds from sale of other investments    769  
Cash flows provided by (used in) investing activities (106,563 )   39,799  
  Financing activities     
Withholding taxes paid on share-based awards (8,919 )   
Proceeds from exercise of warrants and options 12    1  
Cash flows provided by (used in) financing activities (8,907 )   1  
Effect of foreign currency translation on cash and cash equivalents 18,825    (51,416 )
Net change in cash and cash equivalents (182,842 )   (89,993 )
Cash and cash equivalents, beginning of period 1,078,023    1,199,693  
Cash and cash equivalents, end of period $ 895,181    $ 1,109,700  
  Supplemental cash flow information     
Interest paid $    $ 90  
Interest received 2,961    11,575  
Income taxes paid 858    
 

  

Non-GAAP Measures
 

 

Cronos Group reports its financial results in accordance with Generally Accepted Accounting Principles in the United States ("U.S. GAAP"). This press release refers to measures not recognized under U.S. GAAP ("non-GAAP measures"). These non-GAAP measures do not have a standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these non-GAAP measures are provided as a supplement to corresponding U.S. GAAP measures to provide additional information regarding the results of operations from management's perspective. Accordingly, non-GAAP measures should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. All non-GAAP measures presented in this press release are reconciled to their closest reported US GAAP measure. Reconciliations of historical adjusted financial measures to corresponding U.S. GAAP measures are provided below.

 

  Adjusted EBITDA  

 

Management reviews Adjusted EBITDA, a non-GAAP measure which excludes non-cash items and items that do not reflect management's assessment of on-going business performance of our operating segments. Management defines Adjusted EBITDA as net income (loss) before interest, tax expense, depreciation and amortization adjusted for: share of loss from equity accounted investments, impairment loss on long lived assets, loss (gain) on revaluation of derivative liabilities, transaction costs related to strategic projects, other, net, loss from discontinued operations, share-based payments and review costs related to the restatement of the Company's 2019 interim financial statements, the Company's responses to the reviews of such interim financial statements by various regulatory authorities and legal costs defending shareholder class action complaints brought against the Company as a result of the restatement.

 

Management believes that Adjusted EBITDA provides the most useful insight into underlying business trends and results and provides a more meaningful comparison of period-over-period results. Management uses Adjusted EBITDA for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets.

 

The following tables set forth a reconciliation of net loss as determined in accordance with GAAP to Adjusted EBITDA for the periods indicated (U.S. dollars in thousands):

 
                                                                                                                                                      
(in thousands of U.S. dollars)   Three months ended June 30, 2021  
   United States     Rest of World     Corporate  
Expenses  
   Total  
Net income (loss) $ (11,719 )   $ 79,627    $ (11,133 )   $ 56,775  
Interest income, net (20 )   (2,273 )     (2,293 )
Share of loss from equity accounted investments    1,115      1,115  
Gain on revaluation of derivative liabilities    (115,248 )     (115,248 )
Transaction costs      2,758    2,758  
Other, net    (1,127 )     (1,127 )
Loss from discontinued operations    561      561  
Share-based payments 822    1,743      2,565  
Review costs related to restatement of 2019 interim financial statements      1,932    1,932  
Depreciation and amortization 206    2,997      3,203  
Adjusted EBITDA $ (10,711 )   $ (32,605 )   $ (6,443 )   $ (49,759 )
 

 

 
                                                                                                                                                      
(in thousands of U.S. dollars)   Three months ended June 30, 2020  
   United States     Rest of World     Corporate  
Expenses  
   Total  
Net loss $ (45,566 )   $ (55,095 )   $ (7,042 )   $ (107,703 )
Interest income, net (9 )   (3,725 )     (3,734 )
Share of loss from equity accounted investments    794      794  
Impairment loss on long-lived assets 40,000        40,000  
Loss on revaluation of derivative liabilities    35,880      35,880  
Other, net    9      9  
Loss from discontinued operations    46      46  
Share-based payments 756    1,790      2,546  
Review costs related to restatement of 2019 interim financial statements      3,459    3,459  
Depreciation and amortization 34    1,683      1,717  
Adjusted EBITDA $ (4,785 )   $ (18,618 )   $ (3,583 )   $ (26,986)  
 

 

 
                                                                                                                                                                  
(in thousands of U.S. dollars)   Six months ended June 30, 2021  
   United States     Rest of World     Corporate
expenses
 
   Total  
Net loss $ (23,811 )   $ (62,520 )   $ (18,519 )   $ (104,850 )
Interest income, net (23 )   (4,599 )     (4,622 )
Share of loss from equity accounted investments    2,758      2,758  
Impairment loss on long-lived assets 1,741        1,741  
Loss on revaluation of derivative liabilities    1,626      1,626  
Transaction costs      3,259    3,259  
Other, net    (911 )     (911 )
Loss from discontinued operations    582      582  
Share-based payments 1,567    3,497      5,064  
Review costs related to restatement of 2019 interim financial statements      3,937    3,937  
Depreciation and amortization 305    4,778      5,083  
Adjusted EBITDA $ (20,221 )   $ (54,789 )   $ (11,323 )   $ (86,333 )
 

 

 
                                                                                                                                                      
(in thousands of U.S. dollars)   Six months ended June 30, 2020  
   United States     Rest of World     Corporate
expenses
 
   Total  
Net income (loss) $ (52,082 )   $ 33,772    $ (13,712 )   $ (32,022 )
Interest income, net (16 )   (11,469 )     (11,485 )
Share of loss from equity accounted investments    1,966      1,966  
Impairment loss on long-lived assets 40,000        40,000  
Loss on revaluation of derivative liabilities    (77,488 )     (77,488 )
Other, net    (785 )     (785 )
Loss from discontinued operations    46      46  
Share-based payments 1,462    3,520      4,982  
Review costs related to restatement of 2019 interim financial statements      7,866    7,866  
Depreciation and amortization 69    2,810      2,879  
Adjusted EBITDA $ (10,567 )   $ (47,628 )   $ (5,846 )   $ (64,041)  
 

  

Foreign currency exchange rates
 

 

All currency amounts in this Press Release are stated in U.S. dollars ("USD"), which is our reporting currency, unless otherwise noted. All references to "dollars" or "$" are to USD. The assets and liabilities of the Company's foreign operations are translated into USD at the exchange rate in effect as of June 30, 2021, June 30, 2020 and December 31, 2020. Transactions affecting shareholders' equity are translated at historical foreign exchange rates. The consolidated statements of net income (loss) and comprehensive income (loss) and the consolidated statements of cash flows of the Company's foreign operations are translated into USD by applying the average foreign exchange rate in effect for the reporting period using Bloomberg.

 

The exchange rates used to translate from USD to Canadian dollars ("C$") is shown below:

 
                          
  (Exchange rates are shown as C$ per $)    As of  
   June 30, 2021     June 30, 2020     December 31, 2020  
Average rate 1.2293   1.3856   1.3036
Spot rate 1.2395   1.3576   1.2751
Year-to-date average rate 1.2481   1.3646   1.3411
 

  For further information, please contact:  
Shayne Laidlaw
Investor Relations
Tel: (416) 504-0004
investor.relations@thecronosgroup.com  

 

  Primary Logo 

 

News Provided by GlobeNewswire via QuoteMedia

The Conversation (0)
Closeup of lush green cannabis leaves.

Thailand Reverses Course on Cannabis, Moves to Recriminalize Amid Political Fallout

Thailand’s groundbreaking experiment with cannabis decriminalization is rapidly unraveling, with the government formally moving to reclassify the plant as a narcotic and ban recreational sales.

The decision has sent shockwaves through an industry once projected to be worth over US$1 billion.

The country’s Ministry of Public Health issued an order this week stating that cannabis only be sold with a medical prescription, effectively ending a short-lived era of liberal recreational access.

Keep reading...Show less
Cannabis leaf over map of Australia.

A State-by-State Guide to Cannabis in Australia

Australia federally legalised medicinal cannabis in 2016, and Australia's cannabis market has seen major growth since then.

Medical cannabis approvals were up by 120 percent in the first half of 2023 compared to the same period in 2022. Statista forecasts that Australian cannabis revenue will reach AU$3.73 billion in 2024 and grow at an annual rate of 3.22 percent, culminating in market volume worth AU$4.53 billion by 2029.

However, Australia’s cannabis industry is still young. Despite there being a strong case for a regulated market, which was outlined in a July 2024 report by the Penington Institute, recreational use is not legal and medical access remains limited and regulated.

Keep reading...Show less
Cannabis leaf on road marked with "2025," with sunlight in the background.

New Cannabis Consumption Trends, Regulatory Shifts Seen Driving Market in 2025

Understanding trends in the cannabis industry is paramount for investors eyeing a market with steady growth potential, but the landscape is complex as products and regulations continue to evolve.

Consumption habits are changing as edibles, vaping and THC beverages gain traction, especially among younger users, and cannabis companies are adapting their offerings to meet shifting demand.

Meanwhile, regulatory uncertainty, particularly surrounding the future of the US Farm Bill and state-level restrictions on hemp-derived cannabinoids, continues to challenge the market.

Despite these headwinds, production data and long-term growth forecasts suggest the cannabis industry remains on a promising — albeit turbulent — path. Read on for more on key trends to watch in 2025.

Consumption methods evolving post-legalization

Shifts in consumer behavior are reshaping markets across the board, and the cannabis industry is no exception.

While smoking remains the dominant method of cannabis consumption, a recent report from the Centers for Disease Control and Prevention highlights the growing popularity of edibles, vaping and dabbing.

The report notes that vaping and dabbing are particularly pronounced among younger adults.

A separate study published by the American Medical Association and funded in part by the Canadian Institutes of Health Research also points to how product preferences have changed among Canadian users since legalization in 2018.


The study indicates that while the use of flower, cannabis concentrates, oil, tinctures and topicals has decreased during that time, the use of vape cartridges, edibles and beverages has increased.

Edibles and beverages were legalized in Canada in late 2019, and Truss Beverage was one of the first players to introduce cannabis-infused drinks. Truss was a joint venture formed by Molson Coors Canada (TSX:TPX.A,TSX:TPX.B) and HEXO, a cannabis company that has since been acquired by Tilray Brands (TSX:TLRY,NASDAQ:TLRY).

In early 2020, Tilray launched a lineup of confectionery, wellness products and beverages through its subsidiary, High Park; Canopy Growth (TSX:WEED,NASDAQ:CGC) made a similar move. These companies gradually brought their products to the US as more states legalized cannabis for medical and/or recreational use.

Today, established cannabis brands typically offer edibles and beverages alongside their other products. Organigram Global (TSX:OGI,NASDAQ:OGI) is one of the newest US entrants, with its April acquisition of Collective Project providing immediate access to the US hemp-derived THC beverage market.

Growing awareness of health and wellness, potentially amplified by the pandemic-led adoption of health trackers, appears to be making an impact on the alcoholic beverage market.

A 2023 Gallup poll reveals a two decade decline in alcohol consumption, particularly among younger adults, suggesting a shift towards more health-conscious lifestyles within this demographic.

Craft beer production declined by 4 percent year-on-year in 2024, according to data collected by the Brewers Association. This marked the largest drop in the industry's history, excluding the pandemic. For small, independent craft breweries, 2024 marked the third consecutive year of declining production. A drop in the number of operating small breweries last year provides further evidence of this trend, with 501 closures in 2024 versus 434 openings.

Challenges in the alcohol market extend beyond the brewing industry, with the New York Times recently reporting the closure of a handful of nightclubs facing decreased alcohol sales alongside rising insurance and rent costs.

Meanwhile, cannabis lounges have been popping up across the US for the last several years. As of early 2025, several states had legalized or were in the process of implementing regulations for cannabis consumption lounges.

Hemp market growth despite regulatory uncertainty

The burgeoning hemp industry is another segment of the expanding cannabis market.

The legalization of industrial hemp — defined as cannabis with a THC concentration of 0.3 percent or less — through the 2018 Farm Bill led to initial investment and optimistic projections for CBD wellness products and various industrial applications. The sector’s rapid evolution also brought the rise of hemp-derived intoxicating cannabinoids, creating a market that presented both opportunities and complexities for participants.

However, after an initial boom, a lack of infrastructure and clearly defined regulations for CBD, as well as state-level variations and market oversupply, ultimately contributed to a quick retraction.

2024 was a pivotal year for the US hemp industry, as the hemp-related provisions of the 2018 Farm Bill — originally set to expire in September 2023, but extended to December 31, 2024 — created an urgent need to address critical issues like THC limits and the regulation of novel hemp-derived cannabinoids. A major point of contention was the proposed shift from defining hemp based on Delta-9 THC concentration (0.3 percent or less) to “total THC,” which includes THCA.

This change had the potential to significantly impact farmers and processors, as many hemp varieties that are compliant under the Delta-9 THC rule could exceed the 0.3 percent limit when THCA is included.

Various bills and amendments were proposed in 2024 as part of the Farm Bill discussions, each with different approaches to regulating hemp. Separate regulatory frameworks for industrial hemp and hemp grown for cannabinoids were suggested, and many states took their own action, leading to a patchwork of regulations and even outright bans.

Despite challenges, data from the US Department of Agriculture suggests signs of recovery.

The department's annual National Hemp Report from 2024 points to an 18 percent increase in industrial hemp production value between 2022 and 2023, with output growth seen in specific sectors like floral (18 percent), fiber (133 percent) and seed hemp (414 percent). The 2025 report from the Department of Agriculture indicates further expansion, with notable increases observed in both acreage (up 64 percent from 2023) and value (46 percent).

The 2024 Farm Bill ultimately did not pass, and right now the hemp industry is operating under a temporary extension of the 2018 Farm Bill under the American Relief Act of 2025, signed into law on December 21, 2024.

The 2018 Farm Bill is now set to expire on September 30, 2025.

While analysts for Markets and Markets project that the North American hemp industry will grow at a CAGR of 22.4 percent and ultimately reach a valuation of US$30.24 billion by 2029, the future of the industry will be heavily influenced by the outcome of the ongoing Farm Bill discussions.

US cannabis legalization remains stalled

Although there is clear demand for cannabis products, the now-defunct rescheduling process in the US is likely to continue casting a shadow of uncertainty over the industry's long-term trajectory.

Legal and procedural delays, including allegations of improper conduct and bias within the US Drug Enforcement Administration (DEA), led to hearing cancellations, and the new administration of US President Donald Trump has brought leadership changes to key agencies like the DEA and the Department of Justice.

Terry Cole, who Trump nominated to be DEA administrator on February 11, has a history of opposing cannabis legalization in the country. Similarly, Pam Bondi, Trump’s pick to lead the justice department, staunchly opposed a movement to legalize medical cannabis during her tenure as Florida’s attorney general.

While there have been bipartisan efforts in Congress to end federal cannabis prohibition and establish regulations for eventual legalization, the DEA’s actions and statements indicate a potential stall or reversal of progress.

In addition to that, new research is adding complexity to the debate.

A study published in the American Journal of Psychiatry this past March highlights an association between the use of high-potency cannabis strains and increased risks of psychosis, a factor that may not have been fully considered by the Department of Health and Human Services. As stronger cannabis strains become more widely available, a reassessment of their potential health risks may be required.

Investor takeaway

While the cannabis industry holds promise for growth and innovation, investors must remain acutely aware of the regulatory uncertainties and market volatility that will undoubtedly shape its trajectory in the years to come.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

Person touching a cannabis plant; Australia map in flag colours.

ASX Cannabis Stocks: 10 Biggest Companies

While Australia has yet to legalise all forms of cannabis, the country is a growing medical cannabis and hemp market, with many companies manufacturing, researching and exporting the plant-based product.

Medical cannabis was federally legalised in 2016, and the export of cannabis from Australia was legalised in 2018. As for recreational use, the only state to legalise recreational use and possession so far is the Australian Capital Territory, which did so in 2020, but it did not establish a regulated recreational cannabis market.

The country's medical cannabis market has been steadily expanding in size and scope. A Penington Institute report shows that Australians spent approximately AU$400 million on medicinal cannabis in the first half of 2024, 72 percent higher than the AU$234 million they spent over the entirety of 2022.

Keep reading...Show less
Cannabis leaves, gavel.

Cannabis Round-Up: Rescheduling Faces New Roadblocks, SAFER Banking Act Gets Another Look

February 2025 was characterized by an evolving legislative landscape and important financial updates from major players.

These developments underscore the complex and dynamic nature of the sector as it continues to navigate legal, financial, and regulatory challenges while experiencing ongoing growth and evolution.

Discussions around cannabis rescheduling, changes in federal agency leadership, state-level legalization efforts, and financial reports from key companies all contributed to a month of notable activity in the cannabis space.

Keep reading...Show less
Cannabis leaves, US flag.

Cannabis Round-Up: Banking Reform and Rescheduling De-Prioritized as Trump Takes Office

As a new year began, the cannabis industry saw a range of impactful events in January.

Legal obstacles continued to impede progress on a once-promising attempt to reschedule cannabis in the US, and President Donald Trump's leadership choices for key agencies are diminishing hopes it can be accomplished.

Meanwhile, cannabis banking reform won't be discussed at Wednesday's (February 5) meeting of the Standing Senate Committee on Banking, Commerce and the Economy, and Congress seems in no rush to address it.

Keep reading...Show less

Latest Press Releases

Related News

×