The past few months were tough for most pot stocks. Many marijuana companies have managed to deliver beyond expectations in the second quarter. One marijuana stock to watch Cronos Group Inc. (CRON Stock Report) is the latest pot stock to weather the storm and deliver strong results.
These actually surprised the markets. In this regard, it is also important to note that Cronos is one of the larger cannabis companies in the pot stock market. Typically when it comes to larger cannabis companies, good showing could be a good catalyst for the entire industry.
Pot Stock Delivers Surprise Profit
In Q2 2019, this pot stock generated revenues of CA $10.2 million. That reflected a threefold, year-on-year rise from its revenues generated in the prior (year) quarter. Also, Cronos’ cannabis sales were highly impressive selling 1,584 kilos of product in the second quarter. Just like the company’s revenues, cannabis sales recorded a threefold rise, year-on-year as well.
However, the most important thing with regards to Cronos’ results was the fact that it managed to generate a profit of CA $251 million. That translated to earnings per share of CA $0.75. In the prior-year period, the profits stood at $762,000. However, it is interesting to note that analysts had estimated losses of CA $0.03 per share.
Is Cronos A Pot Stock To Buy?
In the company’s most recent press release Cronos Group announced it entered into a definitive agreement to purchase Redwood Holding Group, LLC’s operating subsidiaries. Redwood develops CBD infused products that are produced from the hemp plant. The company also does in-house marketing and distribution of its products. With this agreement, Cronos Group will purchase Redwood for roughly $300 million net of Redwood’s valued cash and debt and subject to a customary working capital adjustment as well.
The better than expected performance from CRON stock is another ray of light for the cannabis sector. The performance from this marijuana stock, coupled with other pot stocks such as GW Pharmaceuticals (GWPH) and Aurora Cannabis (ACB), could indicate that things are not nearly as bad as many might have thought. At the end of the day, the sector has been very cyclical so it will be interesting to see how the next two quarters develop.