Medicinal cannabis marketplace Cronos on track to crack $100m in annual revenue after shareholder huff and puff

After resolving a bitter feud with its founder, medicinal cannabis marketplace Cronos is on track to deliver a bumper year in earnings.

Medicinal cannabis marketplace Cronos says it is on track to hit more than $100m in revenue for the first time this financial year after a drama-fuelled month.

The company – the only cannabis stock on the ASX to deliver a profit and pay a dividend – ­released unaudited accounts for November on Monday, showing annual sales were on track to ­almost double 2021’s result.

However, Cronos management is embroiled in a dispute with its founder – who abruptly left in September – and a push from a major shareholder to oust chief executive Rodney Cocks and executive director Guy Headley from the board.

Revenue for the November surged to $10.7m or $128.4m on an annualised basis. This compares with annual revenue of $67m last year.

Cronos also breached a million medicinal sales for the first time on its CanView marketplace, and is on track to double that figure in coming months.

Mr Cocks said based on the result, the company was confident it could deliver more than $100m in sales this financial year.

“Given the continued growth of unit sales, we anticipate that the second million units should be sold through the platform ­before the end of calendar 2023. This significant achievement could not have been realised without the efforts of the amazing Cronos Australia team,” he said. “This success demonstrates the scalability of the company’s business model, which ... will continue to deliver growth and further shareholder value.”

But investors were lukewarm to the company on Monday, with its shares falling 2.2 per cent to 66.5 cents. This compared with a gain of 0.33 per cent across the broader sharemarket.

Cronos shares have tracked largely sideways since mid-­November since falling from its record high of 99c in October. Until then, the company had a stellar run, soaring 167 per cent since August when it announced its maiden dividend of 1c a share.

Cronos’ sharp share price fall last month attracted the attention of the ASX – after it plummeted from 75c to 59c in a day.

Mr Cocks told the exchange, shares representing about 73.4 per cent of the number on issue were to be released from ­escrow on December 16.

“There may be speculation in the market that the market price of the company’s shares may fall upon the escrowed shares being released from voluntary escrow,” he said.

Cronos was also embroiled in a spat with former chief medical officer Benjamin Jansen – who was sacked in September for “his repeated pattern of inappropriate behaviour, lack of judgment and poor performance”.

Dr Jansen’s cousin Matua Jansen subsequently sought to remove Mr Cocks and executive director Mr Headley from Cronos’s board at its annual meeting last month. Other shareholders rejected the resolutions, with Mr Cocks and Mr Headley receiving 87.6 and 88 per cent of votes cast in their favour.

Ahead of the meeting, the company said it had reached a resolution with Dr Jansen and his wife, Elizabeth, who planned to use her 23.4 per cent stake to support all the board’s recommendations – including voting against the resolution to remove Mr Cocks and Mr Headley.

“The company and Benjamin Jansen acknowledge that their previous statements may have caused offence to each other, and both parties regret that the relationship between them had started to erode,” Cronos said in a statement to the ASX.

“Cronos Australia and Benjamin Jansen are committed to seeing the company develop and grow into a global leader in the medicinal cannabis industry ... the company wishes Benjamin and Elizabeth Jansen the very best in their future endeavours.”