Last week, Cronos Group Inc (TO:CRON) stock took a hit after the cannabis company released its first quarter results. Shares lost a little more than 8.8 percent during the day on the news the Toronto-based company said it anticipates adjusted earnings to drop over the remainder of 2019.
But the stock bounced back. On Friday, it closed up almost 8.4 percent, returning share prices to about the very spot they were earlier in the week. This morning, however, the shares were taking another dip; down more than 6 percent in mid-morning trading.
Cronos reported $6.5 million in revenue for the three-month period ending March 31. Although this figure was a 15-percent gain compared with the previous quarter, it was below analyst estimates. The increase in revenue was driven mainly by an increase in CBD oil sales, the company said in a statement.
The revenue from CBD oil, valued for its therapeutic properties, represented 23 percent of net product revenue in the first quarter of 2019. In the first quarter of 2018, it was only 9 percent of revenue.
Looking a little longer term, the news from the last quarter that may have been skipped over is the fact that the Cronos completed its $2.4-billion deal with Altria Group (NYSE:MO), the U.S.-based cigarette maker. Building on this partnership, the company earlier this month opened Cronos Device Labs, a research facility in Israel to develop vaporizer products designed specifically for cannabinoid applications.
“The launch of Cronos Device Labs is an exciting next step on our journey to become a leader in cannabinoid innovation,” said Cronos Group chairman, president and CEO Mike Gorenstein.
“Cronos Device Labs will play an important role in positioning the company for long-term success by enabling us to build innovative vaporizer products that resonate with our customers and generate shareholder value,” Gorenstein added.
It will be interesting to watch where the stock goes from here before the vaporizers hit the market. Is it time to buy during the dip?