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Cronos shows declining losses, increased cost of sales in 2023

February 29, 2024 | Staff

Cronos Group Inc. says it has improved its cash flow in 2023 due to lower operating expenses and increased exposure to international markets.

Cronos, the Canadian company behind cannabis brands like Peace Naturals, shared its Q4 2023 financial results on February 29, reporting $23.9 million in consolidated net revenue for the last three months of 2023 and $87.2 million in sales for the year ending 2023.

This represents a slight increase from $22 million in consolidated net revenue in Q4 2022 and $86.7 million in sales for fiscal year 2022.

However, this net revenue couldn’t cover the costs of doing business for Cronos, which reported $45 million in net losses in Q4 2023, a decline from $76.1 million in losses in the same quarter for 2022. Annual losses were also down, with Cronos reporting $70.4 million in losses for 2023 compared to nearly $155.2 million in 2022.

The cost of sales increased from $71.3 million in 2022 to $74.5 million in 2023.

Cronos says the increase in its year-over-year sales was largely due to higher sales in Canada and exports to Germany and Australia. These improvements were somewhat offset by lower cannabis flower sales in Israel, which it blames on the Israel-Hamas War and increasing competition. Israel has also pushed back against Canadian cannabis producers it accused of “dumping” product into its market, saying this is undermining local growers.

In Q3 2023, Cronos also announced plans to wind down operations at its Winnipeg, Manitoba facility (“Cronos Fermentation”). In the second quarter of 2023, Cronos exited its United States hemp-derived CBD operations.

“In 2023, we significantly improved our cash flow from operations driven primarily by operating expense savings, while simultaneously expanding our portfolio of borderless products in Canada and Israel and entering two international markets, Germany and Australia,” said Mike Gorenstein, Chairman, President, and CEO of Cronos.

Cronos sells the brands Spinach, Lord Jones, Peace Naturals, and Lit (Israel).