Cannabis producer Cronos soars after beating the its highest profit estimate

• Cronos Group soared as much as 9% in early Thursday trading after surpassing the highest analyst estimate for second-quarter revenue.
• The company attributed its quarterly success to the newly launched adult-use market in Canada and increased interest in cannabis oil.
• Cronos' second quarter saw its acquire CBD-distributor Redwood Holding Group, hire Mondelez veteran Dr. Todd Abraham as chief innovation officer, and open a new R&D facility in Israel.
• Watch Cronos trade live here.

Cronos Group stock spiked as much as 9% in early trading Thursday after surpassing the highest analyst estimate for its second-quarter figures.

The cannabis company's bottom line was bolstered by increased production capabilities and the new adult-use market in Canada, according to its earnings report. It also saw continued growth in cannabis oil sales, which made up 20% of product revenue in the second quarter.

Here are the key numbers:

Revenue: $10.24 million, versus the $7.35 million consensus estimate and highest estimate of $8.80 million

Earnings per share: $0.22, versus the $0.03 estimated loss per share

Kilograms sold: 1,584, up 232% from the year-ago period

Cronos acquired US-based CBD distributor Redwood Holding Group August 2 for $300 million, boosting its presence in the US and its portfolio as CBD grows in popularity. Cannabidiol, or CBD, is currently a $1 billion market in the US and analysts believe it could be worth $16 billion by 2025.

The Redwood purchase was just one of several second-quarter acquisitions and partnerships for Cronos. The cannabis producer bought a state-of-the-art fermentation and manufacturing facility from Apotex Fermentation in Canada, and opened a new R&D office in Israel named Cronos Device Labs.

Cronos maintains its connection with Altria Group, one of the largest tobacco producers and a helpful partner for sourcing help in the US. The strong second-quarter results and continued collaboration will drive the company's expansion, analysts said.

"We maintain a positive bias given the capital position here (roughly C$ 2 billion in cash), the relationship with Altria, and advantaged positioning for attacking the global cannabis category particularly the U.S.," analysts at Stifel wrote in a Thursday note.

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

Cronos' second quarter also saw its hiring of Mondelez veteran Dr. Todd Abraham as chief innovation officer. Abraham previously served in leadership positions at Nabisco Foods Company and The Pillsbury Company, and is now responsible for Cronos' development and research initiatives.

Cronos closed Wednesday at $14.43 per share, up about 49% year-to-date.

The company has two "buy" ratings, eight "hold" ratings, and five "sell" ratings from analysts, with a consensus price target of $14.57 according to Bloomberg data.

Now read more markets coverage from Markets Insider and Business Insider:

China bought gold for the 8th straight month - and it's just the latest sign the nation is in the trade war for the long haul

'Our problem is not China': Trump just lashed out at the Fed on Twitter again, saying it needs to cut interest rates faster

This 26-year-old emailed Mark Cuban asking for an investment in his 3D Martian rocket startup. Cuban replied in 5 minutes and soon after gave a $500,000 commitment.

NOW WATCH: Violent video games are played all over the world, but mass shootings are a uniquely American problem