Canopy Growth Corporation (WEED.TO) (CGC) released its financial results for the third quarter fiscal 2019 ending December 31, 2018. Net income for the quarter was $74.9 million compared to a net income of $11.0 million for the same time period during last year. Net revenue increased 282% to $83 million over last year’s $21.7 million for the same time period. Total gross revenue increased 350% to $97.7 million.
The company reported that the adjusted EBITDA in the third quarter fiscal 2019 amounted to a loss of $75.1 million compared to a loss of $5.7 million in the same period last year. The net loss per diluted share was $0.38. Cannabis shipments totaled 10,102 kilograms and kilogram equivalents.
“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,” said Bruce Linton, Chairman & Co-CEO, Canopy Growth. “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.”
Oils, including the company’s softgel capsules, accounted for 33% of product revenue during the quarter, up from 23% of product revenue in the same period last year. During the third quarter of fiscal 2019, approximately 30% and 42% of recreational and medical sales, respectively, were comprised of oils, including softgel capsules.
The company said that during the transition from a “medical marijuana” business to a business producing clinically proven cannabinoid therapies, Canopy experienced a decline in its Canadian medical market demand in the quarter. The decline may be attributed to the initial adjustment to the available legal recreational market which patients can also access.
Adult Use Sales
Linton added, “The Canadian recreational cannabis market will be dominated in the long term by businesses delivering excellent products and consumer experiences. Sales from the first wave of products and retail environments launched in the third quarter demonstrate that we are capturing consumers’ attention.”
Canopy said that it placed a significant focus on shipping core products, backed by deep inventory levels, into physical retail store networks across the country. At the end of the quarter, Canopy said that it began shipping its softgel capsules and pre-rolled joint products in recreational channels across the country. Canopy Growth finalized its acquisition of HIKU during the second quarter, adding the Tokyo Smoke retail channel to complement its Tweed banner stores.