Canopy Growth like a ‘big rig’ on the move
TORONTO — Licensed marijuana producer Canopy Growth Corp. more than doubled its thirdquarter revenue compared with a year ago but fell short of analysts’ expectations for even stronger sales.
The Smiths Falls, Ont.-based company reported revenue of $21.7 million for the quarter ended Dec. 31, more than double the $9.8 million earned in the last three months of 2016.
The results were driven by a significant increase in domestic sales as well as sales in the German medical market, chair and chief executive Bruce Linton told analysts on a conference call Wednesday.
“It feels like the big rig is just starting to move along the track now,” he said.
The market was expecting quarterly revenues of $24.2 million, according to analysts surveyed by Thomson Reuters.
The company also saw a roughly 138 per cent increase in active registered patients to 69,000, up from 29,000 a year ago. However, analysts say patient numbers can be a murky metric because patients may register with more than one licensed producer.
The growth came as Canopy’s profits attributable to the company fell to $1.6 million or a penny per diluted share, from nearly $3 million or two cents per diluted share a year ago.
The company also announced Wednesday it was one of six licensed producers to sign a letter of intent to supply the Quebec market. As part of the agreement with the Societe des alcools du Quebec, which will handle sales of recreational cannabis in the province when it is legal later this year, Canopy will provide 12,000 kilograms of cannabis annually.
Canopy said it sold 2,330 kilograms and kilogram equivalents of marijuana in the quarter at an average price of $8.30 per gram. That compared with 1,245 kilograms at $7.36 per gram a year earlier.
The higher average price stemmed from the addition of more oil products, such as softgel capsules — which have a higher margin than dried cannabis — and the higher selling price of medical cannabis in Germany. Cannabis oil sales accounted 23 per cent of Canopy’s revenue for the latest quarter, compared to 13 per cent in the same period a year ago.
Canopy’s earnings before interest, tax and other items was a loss of $7.1 million, compared to a loss of $1.4 million during the same period a year ago.
Canopy’s EBITDA was impacted by investments in branding and expanding its international reach and other activities during the quarter, chief financial officer Tim Saunders said. These actions are “really necessary to strengthen the company’s global leadership position, both in Canada and internationally,” Saunders told analysts.
Meanwhile, Linton said Canopy has begun collaborating on cannabis-based drinks with Constellation Brands since the Corona-beer maker signed a deal to acquire a nearly 10-per-cent stake in the licensed producer for $245 million.