Cronos Group Inc. announced its 2024 first quarter business results. “Cronos achieved its highest quarterly net revenue from continuing operations on record at $25.3 million, up 30% year-over-year. The top line was propelled by 31% growth year-over-year in Canada, and 27% growth year-over-year in Israel. Cronos’ strong first quarter results are a testament to our global team’s commitment to excellence, innovation and their ability to adapt to changing market conditions,” said Mike Gorenstein, Chairman, President and CEO, Cronos.
First Quarter 2024
- Net revenue of $25.3 million in Q1 2024 increased by $5.8 million from Q1 2023. The increase was primarily due to higher cannabis flower and cannabis extract sales in Canada and higher cannabis flower sales in Israel, partially offset by an adverse price/mix in the Canadian cannabis flower category driving increased excise tax payments as a percentage of revenue.
- Gross profit of $4.5 million in Q1 2024 increased by $1.6 million from Q1 2023. The increase was primarily due to higher cannabis flower and extract sales in the Canadian adult-use market, higher cannabis flower sales in Israel and favorable labor, overhead and inventory variances, partially offset by an adverse price/mix in the Canadian cannabis flower category driving increased excise tax payments as a percentage of revenue.
- Adjusted EBITDA of $(10.7) million in Q1 2024 improved by $5.0 million from Q1 2023. The improvement year-over-year was driven by a decrease in general and administrative expenses, lower research and development expenses and an increase in gross profit.
Business Updates
Brand and Product Portfolio
Spinach®
Spinach® continues to gain recognition as the go-to brand for a wide array of products featuring different cannabinoid combinations, potency ranges and flavor profiles. In the edibles category, the Spinach® brand held a 14.4% market share in Q1 2024, across the SOURZ by Spinach® and Spinach FEELZ™ sub-brands, according to Hifyre. We are continuously evolving the product offering and bringing new strategies to market that have been instrumental in this success. A key addition to our product lineup is the 1-piece 10mg THC product called Fully Blasted under the SOURZ by Spinach® brand, which hit select markets in March. This product has quickly gained market share in the two markets it’s in, Alberta and British Columbia, as it addresses a clear consumer need. Fully Blasted edibles will launch more broadly across Canada in the coming weeks.
Cronos’ strong cannabis cultivar breeding program and portfolio of genetics continued to drive growth, propelling the Spinach® brand to become the number one flower brand in Canada, with a 6.5% market share in Q1 2024, according to Hifyre. Spinach® has three products in the top-15 for market share in the cannabis flower category, led by our GMO Cookies genetic across various pack sizes, according to Hifyre. Our proprietary genetics breeding program continues to provide our portfolio with winning products across markets.
The Spinach® brand was ranked third in the vape category in Q1 2024, holding an 7.6% market share, according to Hifyre. In Q1 2024, we introduced two new Spinach® all-in-one vapes, Pineapple Paradise and Blueberry Dynamite that are performing well and helping to drive market share gains. Spinach® continues to be the number one rare cannabinoid vape brand by market share, with products that feature cannabinol (CBN), cannabigerol (CBG), and cannabichromene (CBC), holding four spots in the top five market share among rare cannabinoid vapes. We continue to develop this portfolio to bring differentiated flavor and cannabinoid combinations to market in formats and sizes consumers’ desire.
In Q1 2024, Spinach® was ranked ninth in the pre-roll category with 2.3% market share, according to Hifyre. In Q1 2024, we launched multiple products across the Spinach® portfolio, including, Spinach® Fully Charged multi-pack pre-rolls. Winning in the pre-roll category is a top priority, and we will continue to utilize our robust product development capabilities to formulate differentiated products to win with consumers.
Lord Jones®
Following a successful launch in Q4 2023, our Lord Jones® Hash Fusions pre-rolls rose to be the number one hash infused pre-roll in Q1 2024, according to Hifyre. These infused pre-rolls have been designed with an optimized ratio of ice water hash to flower, meticulously researched and sensory-tested to drive a smoother consumption experience and preserve the flowers’ terpene-rich, bold flavors.
In January 2024, Cronos launched a Lord Jones® live resin vape featuring sought-after cultivars that deliver a true-to-plant flavorful full-spectrum live resin experience. Crafted with the discerning cannabis consumer in mind, these products embody a commitment to excellence, offering an unmatched combination of curated strains, pure live resin, and elegant high-quality hardware.
In February 2024, we shipped our next ground-breaking edible innovation, this time in the chocolate category. The Lord Jones® Chocolate Fusions edibles were researched and developed over multiple years and feature artisanal chocolate and high-quality ingredients in three flavors – Cookies and Cream, Dazzleberry Pop, and Salted Caramel Crunch. With this product innovation, we are aiming to reinvent the chocolate category, and we think this product will drive increased consumer demand for cannabis-infused chocolates. Its Lord Jones® products across pre-rolls, vapes, and edibles continue to gain traction in their respective categories, and we are excited about the growth we are seeing from this brand.
About Cronos
Cronos is an innovative global cannabinoid company committed to building disruptive intellectual property by advancing cannabis research, technology and product development. With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos’ diverse international brand portfolio includes Spinach®, PEACE NATURALS® and Lord Jones®. For more information about Cronos and its brands, please visit: thecronosgroup.com.
