- Cannabis producer Canopy Growth reported third-quarter revenue that beat the Wall Street consensus estimate.
- But its adjusted EBITDA loss was worse than expected.
- It was the first time the company posted financial results since Canada officially legalised the full use of marijuana in October.
- Watch Canopy Growth trade live.
Shares of Canopy Growth were up 5.57% to $US48.69 apiece early Friday after the company reported third-quarter revenue that topped Wall Street’s expectation.
The cannabis producer said it generated 97.7 million Canadian dollars ($US73.6 million) in revenue, up 283% year-over-year. Wall Street analysts were expecting C$78.7 million ($US59.2 million), according to Bloomberg data.
Canopy posted an adjusted EBITDA loss of C$75.1 million ($US56.5 million), worse than the C$45 million ($US33.9 million) loss that was expected by two analysts surveyed by Bloomberg.
The company sold 10,102 kilograms and kilogram equivalents, up 334% versus a year ago. After including recreational marijuana, which sold at a cheaper price than medical marijuana, its average selling price was C$7.33 in the quarter, representing a 12% decrease.
“Our successful first full quarter with recreational sales in Canada reinforces our long held strategy of making meaningful investments early in order to secure market share,” Bruce Linton, the company’s chairman and co-CEO said in a press release.
“With a strong cash position, we added strategic assets and IP through acquisitions to accelerate the sophistication of our inputs with ebbu, and our consumer-facing outputs with Storz and Bickel.”
Canopy’s revenue beat “is a relief given the meaningful miss last quarter,” said Cowen analyst Vivien Azer in a note out on Friday.
“The offset, however, seems to be an absence of production efficiencies as cash COGS/gram continued to climb, and was $US5.11 in the quarter, a far cry from the $US2-3 we see from [Canopy Growth’s] peers.”
It was the first time the company posted financial results since Canada officially legalised the recreational use of marijuana in October.
Also during the quarter, Constellation Brands, the maker of Corona beer and Svedka vodka closed its deal to invest $US4 billion in Canopy in November. Supported by the investment from the beverage giant, Canopy said in January that it will invest $US100-$US150 million in an operation site in the southern tier of New York to develop its first extraction and processing facility outside Canada. The marijuana producer said it has received a licence from New York state to process and produce hemp, a source of the popular ingredient cannabidiol, or CBD.
Canopy was up 68% in the past 12 months.
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