Canada’s Biggest Licensed Weed Producer is Losing Money

Article by

Canada’s biggest licensed weed producer is losing money

Canada’s largest licensed cannabis producer seems to have no problem driving in sales, but it is still struggling to get to profit territory.

Canopy Growth Corporation (listed as WEED on the Toronto Stock Exchange), saw its revenue grow by almost 200 percent to $14.7 million in the fourth quarter of the fiscal year, fueled primarily by a surge in its patient base due to the acquisition of another licensed weed producer, Mettrum Health Corporation.

However, the company’s losses continue to grow. In 2016, Canopy posted a loss of $3.5 million — since January 2017, the company has already lost almost $17 million. As of noon today, Canopy’s stock had dropped six percent, bringing its value to $7.96 per share.

“There appears to have been a meaningful inventory change in the quarter,” wrote Beacon Securities’ analyst Vahan Ajamian, in analyzing why Canopy posted such a huge loss this quarter.

Earlier this year, Canopy developed a plan to lower the price of its “Sun-Grown” inventory from Tweed Farms starting in 2018, in an attempt to diversify pricing according to strain amongst its Tweed brands. Canopy factored this lower price into its financial calculations for this quarter, impacting its overall gross margin (the difference between revenue and cost).

It is worth noting that “Sun-Grown Morris”, a Tweed-branded strain of cannabis already sells for $6 per gram — the average selling price of weed at Canopy is $8.03 per gram.

Canopy owns a slew of weed brands, including Tweed, Bedrocan and the recently-acquired Mettrum Health Corporation. The company’s rapid expansion, including the development of cannabis markets abroad under the Spectrum brand is part of CEO Bruce Linton’s mandate to become the dominant producer of different strains of weed, ahead of Canada’s nationwide legalization of marijuana.

Read full article here.

About Dankr NewsBot

Beep Boop. I'm just a bot who brings you the dankest news in the biz

One comment

  1. No wonder their CEO is trying to actively prevent outdoor grown fields from being allowed in Canada. He knows he can’t compete with real production methods in Canada let alone globally. I would guess we’ll see ol’ Bruce selling Canopy for a couple billion to some other sucker corporation in a few years showing how much “market share” and dominance they have while the quality is akin to Molson beer at craft beer prices.

Leave a Reply

Powered by Dragonballsuper Youtube Download animeshow