The pot stocks just can’t seem to get out of bed.
Cronos Group announced Monday that it would delay filing a required annual report with the Securities and Exchange Commission. The company said in a press release it was unable to complete its financial statements for fiscal 2019, pending a review by the board’s audit committee of “several bulk resin purchases and sales of products through the wholesale channel and the appropriateness of the recognition of revenue from those transactions.”
That wasn’t the only bummer for the sector: Tilray reported Monday that fourth-quarter revenue nearly tripled in 2019 from a year ago to $46.9 million. But that didn’t stop the cash from burning: Tilray posted a net loss of $219 million in the quarter and $321 million for all of 2019, thanks in part to a surge in sales, marketing and administrative expenses. Tilray ended the year with about $97 million in cash, down from nearly $500 million at the end of 2018.
The negative news has led investors to quickly sober up. Shares in both companies fell sharply Tuesday morning and have each shed more than 70% over the past year. It is hard to smoke when you are underwater.
Write to Charley Grant at firstname.lastname@example.org
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