Canopy Growth Reports $1.3B Net Loss in Q1

Article by Jeff Lagerquist, Yahoo Finance Canada

Canopy Growth reports $1.3B net loss in Q1 Jeff LagerquistYahoo Finance Canada A worker collects cuttings from a marijuana plant at the Canopy Growth Corporation facility in Smiths Falls, Ontario, Canada, January 4, 2018. (Reuters)

Cannabis giant Canopy Growth Corp. (WEED.TO)(CGC) reported a $1.28 billion net loss in its fiscal first quarter, a more than 1,300 per cent increase over the same period a year ago.

The Smiths Falls, Ont.-based company said the wider-than-expected loss is mainly due to a non-cash loss on the extinguishment of warrants held by alcohol giant Constellation Brands Inc. (STZ)

The Corona-beer marker has a 38 per cent stake in Canopy Growth, with the option of acquiring a majority in the future.

New York-listed shares fell more than 10 per cent in aftermarket trading following the release of the quarterly results.

Canopy Growth reported $90.5 million in revenue net of excise taxes for the period ended June 30, 2019. Adjusted EBITDA was negative $92 million due to losses in Canadian and European operations, the company said.

Analysts expected Canopy Growth to book a net income loss of $166.4 million, $111.2 million in revenue, and an EBITDA loss of $106.3 million.

Canopy Growth said total kilograms and kilogram equivalents of cannabis sold rose to 10,549, an increase of 13 per cent from the fourth quarter. The company said dried cannabis sales in the Canadian recreational market by climbed 94 per cent over Q4. Revenue from international medical cannabis sales climbed 209 per cent year-over-year.

CEO Mark Zekulin did not directly address the wider-than-expected loss related to Constellation Brands in a news release on Wednesday night.

“The company remains focused on laying the foundation for dominance in an emerging global opportunity. This means investments in developing intellectual property, building brands, building international reach, and ensuring scaled production capability for current and future products,” he wrote.

“We are fixated on the process of evolving from builders to operators over the remainder of this fiscal year, meaning that as our expansion program comes to a close in Canada, and as new value-add products come to market in Canada, we demonstrate a sustainable, high margin, profitable Canadian business.”

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