At last the pot stocks are paying dividends.

Not metaphorically either.

Cronos Australia (ASX:CAU) has broken the green ceiling on Monday, making the local industry’s first full year profit and damn it if I haven’t been smoking something – is paying out like a champion.

Up 5% and rising, the small cap cannabis upstart is distributing the sector’s first ever dividend.

Okay. It’s not the largest on the bourse this year and you won’t be buying a lot of cannabis with it. But the extremely welcome 1.0 cent per ordinary share, fully franked dividend is an exciting development for a sector which – let’s be honest – hasn’t been replete with excitement lately.

Nary a single Aussie-listed cannabis co has previously delivered a full-year profit since everyone got all canna-busy back in 2016 when the followers of Woody Harrelson and pot stocks in general celebrated the legalisation of cannabis cultivation.

From thence came the rapid and heady discussions / gags about just how high cannabis stocks could go and how much growth might be involved with talk of multi-billion dollar opportunities to treat conditions from sleep apnoea to inflammatory bowel disease and concussion.

A recognised local industry leader and ex-CMO of sector groundbreaker Incannex (ASX:IHL) – Sud Agarwal – says the sector is deep in what might be considered the come down stage.

Dr Agarwal, who now runs Cannvalate, said the industry went off with a bang five years ago.

“There was kind of (a) new industry excitement… and it may have got overheated,” said Dr Agarwal, who remains Incannex’s biggest shareholder.

“By 2019-2020 things got a bit tighter and certainly in 2021 and the latter half of early 2022, there was a real compression of values. That is mainly because a lot of companies haven’t performed in terms of revenues but also people who had previously been investors in cannabis probably just got fatigued.”

Following CAU’s merger with CDA Health in late 2021, the med-cannabis Group has generated decent, even strong growth, resulting in gross revenues to June 30 of almost $67 million and a net profit after tax of more than $6mn.

An “incredibly proud” Cronos CEO and Executive Director Rodney Cocks told Stockhead in tremulous tones that his CAU team were thrilled to be the first ASX-listed medicinal cannabis company to report a profit and the first to declare a dividend.

“We’ve achieved record growth during the 2022 financial year and it is gratifying that the Company can share its success with its shareholders in a very tangible way.

To ice the cake, the Cronos Australia Board has also resolved to introduce a Dividend Reinvestment Plan (DRP). Participants in the DRP will be entitled to receive a discount of 3% to the Company’s share price.

“Looking forward to 2023, we are confident Cronos Australia is positioned to deliver further growth and shareholder value.

“We believe the market for medicinal cannabis products will continue to grow and based on current sales and growth, revenue for FY23 is likely to exceed $100 million.”

Cocks told Stockhead the Board will look to assess the payment of any future dividends within a capital management framework alongside other potential investment and growth opportunities which may be available to the company, with a view to maximising value for shareholders.