Cronos Group reports the financial results and accompanying management discussion and analysis for the quarter ending March 31, 2017; copies are available on the company’s website (www.thecronosgroup.com) and have been filed with SEDAR (www.sedar.com).
In Q1, Cronos remained focused on the company’s transformation by optimizing operations and building capacity, which resulted in the following highlights from the quarter:
- The company’s wholly-owned subsidiary, In the Zone Produce Inc. (“ITZ”), received a sales license to supplement ITZ’s previous cultivation license. The asset’s location in the Okanagan Valley, British Columbia makes ITZ uniquely positioned to take advantage of the forthcoming recreational legalization in Canada.
- Cronos completed a $17MM bought deal, the net proceeds of which went towards expanding production capacity at both Peace Naturals Project Inc. (“Peace”) and ITZ, purchasing extraction equipment, making investments in certain of its investees, and for general working capital purposes.
- The company deployed approximately $2MM in capital expenditures related to the improvement and construction of Peace production facilities, with existing structures undergoing significant upgrades.
- Cronos re-invested in Whistler Medical Marijuana Corp. (“WMMC”) to help fund WMMC’s announced 65,000 sq. ft. expansion in Pemberton, British Columbia. The additional $1,085,000 investment (at a $75MM pre-money valuation) maintained Cronos’ 21.5% equity position in the asset.
- The company was recognized as the top performer in the 2017 TSX Venture 50 by delivering the highest stock price appreciation in the Diversified Industries sector.
The positive momentum realized in Q1 continued into Q2 with Peace Naturals receiving Good Manufacturing Practice (“GMP”) certification and announcing a 315,000 sq. ft. expansion. This expansion includes a state-of-the-art 286,000 sq. ft. building, which is expected to be the world’s largest purpose-built indoor cannabis production facility. These advancements will establish Cronos as an international leader by enabling Peace to distribute across the globe while setting the gold standard in quality assurance for medical cannabis.
“Cronos is in the best operational and strategic position since the company’s inception. Q1 brought more than just the formalization of our name change; it ushered in a new chapter in the company’s strategic direction. As a GMP certified operator, we will continue to add value for our shareholders through aggressive, disciplined execution on our pipeline of global expansion opportunities,” said Mike Gorenstein, CEO of Cronos.
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