Q4 2017 sales of $1.6 million, up 274% year over year
FY 2017 sales of $4.1 million, up 636% year over year
Peace Naturals greenhouse construction
complete and facility operational
TORONTO, April 30, 2018 /CNW/ - Cronos Group Inc.
(NASDAQ, TSX-V: CRON) ("Cronos Group" or the
"Company") today announced financial results for the fourth
quarter and fiscal year ended December 31,
2017.
"We are building Cronos Group with a focus on the long-term and
2017 set the foundation for the explosive growth we have already
started realizing in 2018," said Mike
Gorenstein," CEO of Cronos Group. "We are extremely
proud of all that our team has accomplished and look forward to a
year of rapid increases in sales, commencing distribution in new
markets, further developing disruptive intellectual property and
launching new iconic brands."
Fiscal Year 2017 Highlights
- Sales increased by $3.5 million,
or 636%, to $4.1 million in FY
2017.
- The Company completed significant improvements to the three
pre-existing indoor production facilities at Peace Naturals Project
Inc. ("Peace Naturals"), to increase production capacity and
efficiency. These facilities are now fully operational.
Construction of building 4, a 286,000 sq. ft. production facility,
remains on schedule and production is expected to commence in the
second half of 2018.
- Launched a strategic joint venture in Israel ("Cronos Israel"), with Israeli
agricultural collective settlement Kibbutz Gan Shmuel ("Gan
Shmuel") to produce and distribute medical cannabis.
Israel has an ideal growing
climate for cannabis with abundant sunlight to support year-round
greenhouse cultivation without the need for supplemental flower
lighting. Cronos Israel anticipates producing high quality cannabis
at significantly lower production costs than in Canada due to Israel's favorable climate and Gan Shmuel's
skilled labor force, existing manufacturing infrastructure, and
ample on-site water access.
- Began distributing medicinal cannabis through G. Pohl-Boskamp
GmbH & Co. KG ("Pohl-Boskamp"), an established European
pharmaceutical manufacturer and distributor. Under the five-year
exclusive agreement, Cronos Group will continue to distribute Peace
Naturals branded cannabis products through Pohl-Boskamp's network
of pharmacies in Germany.
- Initiated a rebrand of Peace Naturals, which included new
proprietary packaging, an evolution of the brand's logo, new
marketing materials, a revised website, a new shopping portal
experience, and new products such as strain specific oils and
limited edition cultivars. Peace Naturals also established a new
classification system for products, which helped educate patients
on key product differences.
- Launched Peace Naturals strain-specific cannabis oils that have
been received favorably by patients. Unlike most alternatives on
the market, these new cannabis oils do not require any secondary
refinement with harsh solvents like ethanol, which means that the
natural balance of the plant is kept intact. This is important
because of the "entourage effect," or the concept that all cannabis
compounds work together synergistically to yield the desired
therapeutic effect.
- Strengthened liquidity by $89.6mm, including a $40.0mm senior secured credit facility and
$49.6mm in gross proceeds from three
common share offerings.
Highlights Subsequent to Fiscal Year 2017
- In February 2018, Cronos Group
became the first licensed producer to list on a major stock
exchange in the United States. The
Company's common shares trade on the NASDAQ under the trading
symbol "CRON".
- In February 2018, the Company
announced a strategic joint for venture in Australia ("Cronos Australia") for the
research, production, manufacture and distribution of medical
cannabis. The Company owns a 50% equity interest in Cronos
Australia. In the initial phase of the joint venture, Cronos
Australia is planning to construct a 20,000 sq. ft. purpose built
indoor facility that is expected to produce up to 2,000 kilograms
of cannabis annually.
- In March 2018, Cronos Group
announced a strategic joint venture with MedMen Enterprises
USA, LLC. The Company owns a 50%
equity interest in the joint venture called MedMen Canada Inc.
MedMen Canada is focused on creating a Canadian branded retail
chain in provinces that permit private retailers, branded products
and research and development activities in Canada.
- In January 2018, Peace Naturals
received a dealer's license (the "Peace Naturals Dealer's
License") from Health Canada pursuant to the Narcotic Control
Regulations and the Controlled Drugs and Substances Act
(Canada) ("CDSA") for the
possession, sale, transportation and delivery of controlled
substances under the CDSA. The Peace Naturals Dealer's License
allows Peace Naturals to develop products that are not yet
available for sale in Canada and
to export medical cannabis extracts, including concentrated oil and
resin products.
- In the first quarter of 2018, we completed construction of,
received regulatory approvals for, and commenced cultivation of
cannabis in, the 28,000 sq. ft. greenhouse at Peace Naturals. The
greenhouse's first harvest is expected to occur in the second
quarter of 2018.
- Strengthened liquidity by raising $146.0
million of gross proceeds through two common share
offerings.
Conference Call
The Company will host a conference
call on Monday, April 30, 2018 at
8:00 a.m. EST to discuss fourth
quarter and fiscal year 2017 results. The call will last
approximately one hour. Instructions for the conference call
are provided below:
Conference ID: 7294557
Topic: Cronos Group Inc. Earnings Call
Toll-free dial-in number: (888) 231-8191
International dial-in number: (647) 427-7450
Additionally, an audio replay of the conference call will be
available two hours after the call's completion and until
11:59 p.m. EST on May 14, 2017. Instructions for the audio
replay are provided below:
Toll-free dial-in number: (855) 859-2056
Passcode: 7294557
About Cronos Group
Cronos Group is a globally
diversified and vertically integrated cannabis company with a
presence across four continents. The Company operates two
wholly-owned Canadian licensed producers regulated under Health
Canada's Access to Cannabis for Medical Purposes
Regulations: Peace Naturals Project Inc., which was the
first non-incumbent medical cannabis license granted by Health
Canada and Original BC Ltd. (British
Columbia), which is based in the Okanagan Valley. The
Company has multiple international production and distribution
platforms including Germany,
Israel and Australia. The Company is rapidly
expanding its global footprint as it focuses on building an
international iconic brand portfolio and developing disruptive
intellectual property. Cronos Group is committed to building
industry leading companies that transform the perception of
cannabis and responsibly elevate the consumer experience.
Forward-looking statements
This news release contains
"forward-looking information" and "forward-looking statements"
within the meaning of applicable Canadian and U.S. securities laws.
All information contained herein that is not clearly
historical in nature may constitute forward-looking information.
Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant
business, economic and competitive risks, uncertainties and
contingencies that may cause actual financial results, performance
or achievements to be materially different from the estimated
future results, performance or achievements expressed or implied by
those forward-looking statements and the forward-looking statements
are not guarantees of future performance. Except as required
by law, Cronos Group disclaims any obligation to update or revise
any forward-looking statements. Readers are cautioned not to put
undue reliance on these forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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SOURCE Cronos Group Inc.