Cronos receives SEC inquiry
The SEC’s Enforcement Division has asked Cronos to preserve records related to the bulk purchase of resin and wholesale sales, according to internal communications, as company investigates revenue-recognition practices.
The Securities and Exchange Commission has sent an inquiry to Cronos Group Inc., one of the largest cannabis producers in Canada, requesting the company retain records related to how it recognizes certain revenue, according to internal Cronos communications reviewed by MarketWatch.
In an email sent to employees from a company lawyer on March 10, Cronos CRON, +2.80% CRON, +4.77% instructed staff to retain certain records pertaining to a “confidential and non-public inquiry by the Securities and Exchange Commission.” The SEC Division of Enforcement has requested that the company retain and preserve all records about revenue recognition related to bulk-resin purchases and wholesale sales of biomass or other products, according to the email and an attached document. Bulk resin is a type of cannabis concentrate, and biomass is marijuana from which companies typically extract oil for vape products or edibles.
Cronos and the SEC declined to comment.