Canopy tries to match high-po­tency pot de­mand

The Hamilton Spectator - - BUSINESS - DAVID PADDON

Canada’s largest pub­licly traded mar­i­juana com­pany says it has had a hard time keep­ing up with de­mand for high­po­tency pot as its list of reg­is­tered med­i­cal mar­i­juana pa­tients more than tripled at the end of last year.

Canopy Growth Corp. says about one-third of its cus­tomers want mod­er­ate to high lev­els of THC, the psy­choac­tive chem­i­cal in mar­i­juana, and they’re will­ing to pay a pre­mium price for it.

“And we re­ally didn’t have that in the (Oc­to­ber-De­cem­ber) quar­ter — al­most ever,” CEO Bruce Lin­ton said Tues­day on a con­fer­ence call af­ter the com­pany re­ported its third quar­ter re­sults.

Lin­ton said Canopy has been hur­ry­ing to meet de­mand, ex­pand­ing its pro­duc­tion ca­pac­ity and ac­quir­ing other pro­duc­ers. It also saw its med­i­cal mar­i­juana pa­tient base bal­loon to 29,000 at the end of last year from 8,000 as of Dec. 31, 2015.

To meet de­mand, Canopy has been de­vel­op­ing a med­i­cal mar­i­juana prod­uct con­tain­ing 27 per cent THC over the past 18 months. It’s await­ing reg­u­la­tory ap­proval to start pro­duc­tion.

The com­pany also re­ported $1 mil­lion in sales in a sin­gle day for the first time, on Feb. 1, a re­mark­able num­ber con­sid­er­ing to­tal rev­enue dur­ing the third quar­ter was less than $10 mil­lion.

“We had a fairly sub­stan­tial amount of some rea­son­ably pricey and high THC prod­ucts that were eaten up,” Lin­ton said.

At Smiths Falls, Ont., where Canopy has con­verted a for­mer Her­shey choco­late plant into its head of­fice, the com­pany has opened more grow rooms, some of which are be­ing ren­o­vated to be­come two-storey pro­duc­tion fa­cil­i­ties.

Canopy also has plans to ex­pand its pro­duc­tion ca­pac­ity at other lo­ca­tions, in­clud­ing those re­cently ac­quired af­ter its pur­chase of Met­trum Health Corp. in an all-stock deal that closed Jan. 31.

Lin­ton said Canopy is poised to ex­pand fur­ther when the fed­eral gov­ern­ment an­nounces how it plans to open up a recre­ational mar­i­juana mar­ket, which is ex­pected in the spring.

For the three months ended Dec. 31, rev­enue was $9.8 mil­lion, up from $3.5 mil­lion a year ear­lier. Net in­come for the quar­ter was $3.0 mil­lion.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.