CRON - Cronos exits its U.S. hemp-derived CBD business to take up to $1.8M charge
2023-05-31 18:25:13 ET
Cronos ( NASDAQ: CRON ) said Wednesday it will streamline its operating structure by winding down and exiting its existing U.S. hemp-derived CBD-focused operations.
The company expects to exit operations by the end of the second quarter of 2023.
As a result of winding down U.S. operations, Cronos expects an increase in its operating expense savings target of $20 to $25 million from $10 to $20 million.
The company expects to incur up to $1.8 million in expenses in Q2 related to inventory write-offs, severance and other employee costs, and asset impairment charges.
The company said it made the decision to improve its cash flow in the near term and position itself to directly enter the U.S. THC market when the necessary changes in U.S. regulatory conditions occur.
From Q2 2023 on, the company intends to report its financial results under one consolidated segment and no longer report the U.S. and Rest of World as separate segments.
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Cronos exits its U.S. hemp-derived CBD business, to take up to $1.8M charge