Cronos Group Inc. (NASDAQ:CRON) Q4 2023 Earnings Call Transcript

It’s really just lessening the penalties of listed adult use markets. And I think with that, you won’t expect to see quality products coming out, improved access to quality products. So it will bifurcate the sort of elicit market with a premium medical market. And you layer the ability to advertise and market on top of that, I think it’s funneling people towards premium product.

Operator: [Operator Instructions] Our next question comes from Yewon Kang with Canaccord Genuity.

Yewon Kang: This is Yewon Kang on behalf of Matt Bottomley. I just wanted to drill down on the gross margin question just a little bit more. Wanted to ask in relation to the relatively stable adjusted EBITDA loss that you guys saw this quarter. Could it be perhaps that there was some kind of reclassification of certain expenses between operating expenses and COGS that led to a drop off in the gross margin profile but a stable adjusted EBITDA loss this quarter?

James Holm: Yes. Thanks for the question. So as we mentioned, it really was predominantly driven by Israel and the increased competitive activity there due to the war and then some inventory write-downs related to that. So that’s really the main driver.

Yewon Kang: Okay, got it. And in terms of Lord Jones launch, I know the launch was only a couple of months ago but could you just comment on maybe the initial reaction from the consumers that you’re seeing across Canada and what the bud peddlers are saying about the brand?

Mike Gorenstein: Sure. Thanks. Yes, I think it’s been very positive. As you mentioned, it’s been — it’s limited in terms of the size of the launch so far. But we want to take a very tailored and cautious approach but when we look at distribution, we’re seeing reorders, we’re seeing strong demand specifically the hash infused pre-rolls, we’re seeing at the top of the category. So we’re very excited about that. And a lot of anticipation, I think, especially given the success we’ve had in SOURZ for Chocolate Fusions which we really expect to be a crowned jewel portfolio and something that cannot just define the category but push the overall chocolate category forward to where we can get — it should be — sits within edible.

Operator: Thank you. And this concludes the conference call. Thank you for your participation. You may now disconnect.