TREND Analysis: Cronos “Gas in the Tank”

Nice to see the other analysts are catching on to the Finished Goods and throughput issues we have been talking about since mid-February. Cronos started the present Q with far lesser Finished Goods Inventory than the preceding Q. Last Q (Q0-1) they entered the Q0 with Finished Goods Inventory greatly surpassing their Sales for Q0. We noted that their decrease in FG Inventory of $10.1 million far outstripped their sales for the Q of $5.6 million, likely meaning a writedown in inventory. I would cation readers that if there was a writedown the previous figures Qs of inventory and bio assets are likely overstated.…

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Inventory in the first Q of Rec- Booking Costs and IFRS VooDoo!! Chickens have come home to roost.

I started paying attention and writing about this industry because of my surprise of how you could sell $1 worth of cannabis and show a gross margin greater than the selling price. In my world, that was very new! Yes... IFRS voodoo! The practice of carrying inventory above the lesser of its actual cost or net realizable value. This is done by running an entry through the income statement that GROSSES UP Inventory to a management determined value of no greater than the Selling price less Selling Costs less the costs already incurred. The latter item is on the balance sheet. Then when you…

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Cronos Q4 F2018 Rundown – Dec. 31, 2018

Cronos, much like Tilray, didn’t give a lot of color in Fins and MDA about Medical versus Rec results nor QoQ changes. Open up the fins and MDA and follow along. Sales: Sales net of Excise tax was $5.6 million, a 49% increase from Q3 F2018. Dry cannabis evidenced a $1.6 million increase [61%], while oils nudged up $0.3 million or 25%.  Cronos stopped breaking down export sales in fins and MDA, so I cannot make a comment on same other than last Q that totaled $0.6 million. Revenue per gram was $5.39/gram down 26% from $7.32/gram last Q, as rec in the sales…

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Tier 2 Cdn LP’s Peer Comparisons: Income Stmt Drivers & Implied Breakeven Sales

I used this graph in "Hexo in Pictures" post, but in case you skipped it because you are not interested in Hexo... I thought I would re-post. I will be posting Trend Analysis per LP against these metrics hereafter, so I wanted to ensure the Base Peer Comparison has been highlighted for you. I will also be swapping HIP out given the Hexo acquisition [take note of HIP EBITDA as this will stack into Hexo in the first few Q's unless they slash duplication - it is before Rec, so keep that in mind. I'll add HIP latest Q once released and before removing…

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