Cronos Group Inc (NASDAQ: CRON) stock rose over 3.9% on 26th March, 2019 (as of 12:07 pm GMT-4; Source: Google finance) after the company in the fourth quarter of FY 18 has reported 248% rise in the net revenues to $5.6 million. The increase in revenue was driven by shipments to the Canadian adult-use market and growth in cannabis oil revenue. The Company has reported gross profit before fair value adjustments of $2.5 million in the fourth quarter 2018 as compared to $0.4 million for the fourth quarter 2017, which is an increase of 449%. The increase in gross profit before fair value adjustments was largely due to an increase in kilograms sold over the comparable prior year period. Gross margin before fair value adjustments was 44% in the fourth quarter of 2018. CRON has reported total operating expenses of $12.4 million in the fourth quarter 2018 as compared to $2.9 million for the fourth quarter 2017, which represents an increase of 328%. The increase in operating expenses was driven by an increase in research and development expenses, talent acquisition and an increase in professional and consulting fees for serves rendered in connection with various strategic initiatives, including the Altria Investment.
Moreover, in 2018, Cronos Group strengthened liquidity by raising $100.0 million and $46.0 million of gross proceeds through two separate bought deal offerings of common shares in April 2018 and January 2018, respectively. In March 2019, the company’s liquidity position was further strengthened by the closing of the Altria Investment. In 2018, CRON has strengthened liquidity by raising $100.0 million and $46.0 million of gross proceeds through two separate bought deal offerings of common shares in April 2018 and January 2018, respectively. In March 2019, the company’s liquidity position was further strengthened by the closing of the Altria Investment. Further, in March 2019, the company had sold all of its approximately 19% equity interest in Whistler Medical Marijuana Corporation (“Whistler”) to Aurora Cannabis Inc. (“Aurora”) in an all-share transaction (the “Aurora Acquisition”). At closing of the Aurora Acquisition, the company received approximately $24.7 million in value of Aurora common shares. Subject to the satisfaction of certain specified milestones, the company expects to receive an additional $7.6 million in value of Aurora common shares.
Additionally, the company had announced a venture with a group of investors led by Bert Mucci, which is a leading Canadian large-scale greenhouse operator. The entity created by this new partnership, Cronos Growing Company Inc., expects to construct an 850,000 square foot, purpose-built, greenhouse on approximately 100 acres of land, owned by Cronos GrowCo in Kingsville, Ontario.