Cronos Group (NASDAQ:CRON) reported its results for the first quarter of fiscal 2020 on May 8. The revenue improved from the fourth quarter of fiscal 2019. The launch of Cannabis 2.0 products might have driven the company’s revenue. Also, there has been an increase in marijuana sales amid COVID-19. The losses for the quarter continued due to more expenses. Let’s take a look at how Cronos Group performed in the first quarter.

Cronos Group Q1 Losses Were Higher Than Estimates

Cronos Group reported revenue growth of 75.1%YoY (year-over-year) to 11.3 million Canadian dollars. Analysts expected the company to report revenue of 13 million Canadian dollars. Sequentially, the revenue increased from 9.6 million Canadian dollars in the fourth quarter of fiscal 2019. The revenue increased due to growth in the recreational cannabis market and higher sales of cannabis vaporizers. The company launched a variety of its vape products in December.

Cronos Group reported an operating loss of $31.9 million in the first quarter, which was higher than the estimate of 29.4 million Canadian dollars. Higher general and administrative expenses contributed to the losses, which increased due to sales and marketing expenses and higher R&D expenses. Cronos Group also incurred an inventory write-down of $8.0 million on dried cannabis and cannabis extracts in the first quarter, which added to the operating losses.

How’s Cronos Group Handling COVID-19?

Cronos Group has been fully operational amid COVID-19 since marijuana is an essential item. The sector has seen a huge surge in demand. The company has taken appropriate measures in all of its facilities to ensure that COVID-19 health guidelines are followed. Cronos Group stated that it has enough inventory to meet the current demand. However, the company also expects its supply chain to take a hit due to pandemic restrictions. In the first quarter, the company continued to roll out its vaporizer devices under the brand names COVE and Spinach. In March, the company also launched PEACE NATURALS branded cannabis vaporizer devices.

Many industry experts think that besides Canopy Growth (NYSE:CGC)(TSE:WEED), Cronos Group could survive the COVID-19 storm. Recently, a Raymond James analyst downgraded Cronos Group stock. However, the analyst thinks that Cronos Group is a safe and defensive cannabis stock with its strong balance sheet. The company ended the first quarter with $1.3 billion in cash and short-term investments. Last month, Canopy Growth’s ex-CEO Bruce Linton also stated that Canopy Growth and Cronos Group are the marijuana companies that could survive the COVID-19 storm. I think that Aphria (NYSE:APHA) and OrganiGram (NASDAQ:OGI) also stand a chance.

Cannabis Stocks’ Performance In May

Cannabis stocks have been on a good ride since the pandemic hit. Notably, cannabis is the only sector that seems to have benefited in the chaos with a surge in cannabis sales. Many US and Candian cannabis companies will report results this month. Aurora Cannabis will report its results this week. Analysts seem bullish before Charlotte’s Web’s earnings. To know more, read Why Analysts Are Bullish before Charlotte’s Web’s Q1 Earnings. Tilray will report its earnings today after the market closes. Curaleaf, Green Thumb Industries, and MedMen will also report their earnings this month.

In May, Cronos Group stock has lost 8.7%, while Aphria has lost 4.1%. Canopy Growth and Tilray have declined by 4.1% and 4.3%, respectively. At 11:11 AM ET today, Cronos Group is trading 3.7% lower, while Canopy Growth is also down 3.3%. Aurora Cannabis is trading 10.6% lower, while Tilray is up 4.6% before its earnings today.

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