Cronos continues to lose large sums of money in Q1

Since the legalization of recreational smoking in Canada in 2018, the once-hyped manufacturer Cronos Group Inc. (TSX: CRON) (Nasdaq: CRON) has continued to amass losses and report poor revenues. On Friday, the Ontario-based company reported a net loss of $ 161 million for the first quarter ended March 31, on net sales of just $ 12.6 million. The biggest factor behind the bright red ink was a $ 116.9 million revaluation loss on derivative liabilities, the company said. If Cronos' share price rises, which it did during the Reddit-fueled rally in pot stocks in February, the company will see a loss from the revaluation of warrants held by its major shareholder, Altria. The American Marlboro cigarette maker invested $ 1.8 billion in a 45 percent stake in Cronos in late 2018 in hopes of capitalizing on Canada's move to legalize weed. But Cronos has continued to burn cash every quarter since the big investment, pumping millions into research and development of rare cannabinoids with partner Gingko Bioworks. At the end of the first quarter, the cannabis company had cash and cash equivalents of $ 1.02 billion. For the first three months of fiscal 2021, the company posted an operating loss of $ 43.5 million. Adjusted earnings before interest, taxes, depreciation and amortization were a loss of $ 37.1 million.