Cronos’ Losses Continue in Q3; Better Upside to Canadian or American Cannabis in Other Names

Cronos’ top- and bottom-line performance declined in the third quarter from the second quarter. Net revenue of $21 million and adjusted EBITDA loss of $22 million were both worse than the previous quarter’s $23 million and $19 million, respectively. Nonetheless, the revenue decline can be partially explained by currency effects from the strong U.S. dollar as well as the strategic repivot of the U.S. business away from CBD beauty products. And while adjusted EBITDA loss was wider sequentially, it’s still dramatically improved from same quarter a year ago. Cronos is still on track to halve its adjusted EBITDA losses this year. We forecast a loss of $77 million compared with $160 million in 2021.