The cannabis industry had been struggling with regards to growth even before the coronavirus pandemic had hit and currently, there are only a few companies that have the capability of still generating growth. Cronos Group (TSX:CRON) (NASDAQ:CRON) is one of the bigger cannabis companies in the industry, and it is one of the firms that could survive the current crisis.

What to Expect Now?

Hence, it could be worthwhile to have a closer look at the company, and the best place to start is by looking through the company’s fiscal first-quarter results. One of the things that need to be mentioned is the fact that the coronavirus crisis has proven to be positive for the cannabis sector.

The product was included among essential items in the U.S. states where cannabis is legal and also in Canada. This particular move resulted in a rise in sales, and consequently, Cronos Group enjoyed a bump in revenues as well. In Q1 2020, the company generated CA$11.3 million worth of revenues, and that reflected a growth of as much as 75.1% year on year. The rise in revenues is a welcome development, but the company continues to report losses. In Q1 2020, its losses stood at CA$45.1 million, and in addition to that, there was an inventory write-down worth CA$8 million as well.

Another major opportunity for the company is the cannabis market in Israel, where the authorities have become far more receptive to the regulatory front. The number of medical cannabis users in Israel has grown rapidly, and Cronos expects approvals to come through for oil products as well as pre-rolls at some point in 2020. At the end of the first quarter, Cronos reported a cash balance of CA$1.3 billion, and that reflected a decline of CA$171 million from the previous quarter.

Much of the decline was due to exchange rate issues, and Cronos asked investors not to worry. It invested CA$7.5 million in its campus meant for Peace Naturals. The company also revealed that it produced CBD through biosynthesis thanks to its partnership with Gingko Bioworks, and this could give Cronos an important competitive edge in the derivatives market. The partnership with Altria remains one of the company’s biggest advantages.

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