Canadian-based Canopy Growth Corporation delivered its fiscal first quarter 2018 results with revenue of C$15.9 million, growing a solid 127% over last year and an 8% sequential increase over the fourth quarter. The company’s focus during the quarter was to shift to a single platform so that all customers could have access to all brands in one online store.
The movement of Tweed, Mettrum and Bedrocan to the new Tweed Main Street store required the sites to go offline and reduced sales for roughly 10 days. Still, Canopy sold 1,830 kilograms in the first quarter, which was an increase of 86% over the previous year and a 5% sequential increase over the fourth quarter. Canopy said that it had over 59,000 registered patients as of June 2017 versus just 16,000 last year.
Canopy believes that most of legal adult use cannabis sales will probably take place through the mail order system for the first two years. The company thinks it will take that long or even longer for a full network of retail stores to be realized. That is why they decided to make the effort now to improve its online market. In addition to creating a customer friendly site, Canopy invested in fulfillment, shipping and IT system capabilities.
“Earlier this year we undertook a strain cultivation planning effort, the direct result of which has been a wave of dried cannabis products coming into Tweed Main Street that began in the first quarter. The next wave, in oil supply, has begun and we expect it to grow in the fall as the capacity of our new oil extraction system reaches the market,” said Chief Executive Officer Bruce Linton. “With the addition of Canada’s first soft gel caps and cannabis from our first CraftGrow partner, Canada’s Island Garden, the ramp of products available through Tweed Main Street is just beginning.”
The average sale per gram increased to C$7.96 over last year’s C$7.08, but slightly down for the fourth quarters average price of $8.03. The company said that the drop in price was due to a lower proportion of oils being sold. The weighted average cost per gram fell sequentially to C$2.78 from C$2.90.
Still Canopy reported a net loss in the first quarter of C$4.4 million or three cents per share, higher than last year’s net loss of C$3.9 million or 4 cents per share. The loss included acquisition costs. Sales and marketing costs jumped to C$6.4 million from $2.3 million as the company pursues domestics and international business opportunities.
The company completed a private placement at the end of July with one investor for approximately 3.1 million shares at a price of C$8.05 a share with net proceeds of $25 million.
The stock jumped from trading near C$8.67 a share to lately trading at C$8.85 a share. For the past year the stock has risen 124%.