Medicinal cannabis giant Cronos Australia pays first dividend after stock market success

Cronos Australia has tripled its annual revenue to $67million in 2022 and will be the first medicinal cannabis firm in the country to pay shareholders a dividend.

The Melbourne-based company’s net profit jumped by $4.6million to $6.04million in the past 12 months – with much of the growth spurred on by its merger with similar Queensland-based business CDA Health in December. 

‘Cronos Australia is very pleased to be able to declare a dividend to its shareholders at 1 cent per share, fully franked,’ CEO Rodney Cocks said this week.

‘This is, yet again, another first for Cronos Australia, being the first ASX-listed medicinal cannabis company to report a profit and now, the first to declare a dividend.’

Mr Cocks said he was pleased the record growth could be shared with stockholders ‘in a tangible way’. 

In addition to the merger, he said profits were also being driven by the general growth in the medicinal cannabis market as restrictions are eased and more healthcare professionals prescribe the drug.

‘Looking forward to 2023, the company is confident that it is well positioned to deliver further growth and shareholder value,’ he said.

Cronos Australia, a subsidiary of the $1.8billion Canadian giant Cronos Group, does not grow or manufacture cannabis products unlike many rival companies in the industry.

Rather it bills itself as having a ‘laser-like’ focus on its ‘CanView’ technology platform which acts as a medicinal cannabis marketplace, its branded products and its ‘cannadoc’ clinics.

In the third quarter of 2022, about 125,500 products were sold through the CanView platform, totaling about $16million in sales. 

Of that about $561,279 was the firm’s own Adaya range. 

‘Companies that have made it (in the industry) have made a strategic shift away from cultivation. We’ve taken lessons from that and it sort of vindicates our decision and our strategy around being asset-lite. But we’re also looking at tech places in the industry moving forward as well,’ Mr Cocks said last month. 

The company will pay the dividend to shareholders on October 11.

Cronos Australia’s ASX stock price has risen to 35 cents a share as of Monday – after a dip to 18 cents a share in mid-July – and up from just over 10 cents a share in 2021.

The brief dip in July was off the back of the NASDAQ listed Cronos Group falling short of financial year analyst revenue estimates, though still reporting a 48 per cent jump in revenue from the previous year.

Since 2016, certain laws have been passed to allow the prescribing and dispensing of medicinal cannabis products to Australians.

Patients can be prescribed medical cannabis, products that contain either THC or CBD, if they pass an eligibility test.

There are now 260,000 prescriptions in Australia since medicinal cannabis was legalised.

Recreational marijuana use remains illegal in Australia.

But calls are growing for cannabis to be legalised in Australia in a move that would follow Canada, a suite of European countries and 18 states in America, including Colorado, New York and California.

A 2019 National Drug Strategy Household Survey revealed a significant minority – over 40 per cent of Australians – believe cannabis should be legalised for personal use.