Canopy Growth Archives - Page 2 of 8 - Green Market Report

Video StaffVideo StaffOctober 4, 2019
marijuanamoneyminute-1280x743.jpg

7min7620

Green Market Report thanks the ArcView Group for allowing us to tape Marijuana Money from their event this week. 

Constellation Brands (NYSE: STZ) wrote down its Canopy Brands (NYSE: CGC) investment to the tune of almost half a billion dollars. Constellation, which also owns Modelo beer and Robert Mondavi wines, said its share of equity losses from its roughly $4 billion investment came to $484.4 million. 

 Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC)  has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.

Venture capital firm Canopy Rivers Inc.  (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company.

Gotham Green Partners has invested an additional $20 million in iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) through the purchase of senior secured convertible notes. Green Gotham said it was part of a broader $100 million financing plan to support the buildout of all existing markets in which iAnthus currently operatesTerrAscend Corp. 

TILT Holdings Inc.  (CSE: TILT) (OTCQB: TLLTF) has negotiated an agreement with six of its remaining founders regarding the immediate forfeiture of all 60,217,088 stock options granted at the time of the merger. Adjusting for the subsequent forfeiture, TILT’s Q2 2019 net loss of $48.9 million would have been almost entirely reduced, bringing the Company close to break-even.

Fire & Flower Holdings Corp. (TSX: FAF) its financial results for the second fiscal quarter ending August 3, 2019, with total revenue of $11.1 million versus $9.5 million for the same time period in 2018. The net loss for the quarter was $6.4 million.

High Tide Inc. (CSE:HITI) (OTCQB:HITIF) announced financial results for the third fiscal quarter of 2019 ending July 31. Revenue in the third quarter increased by 281%, to C$8 million from C$2 million last year. 

48North Cannabis Corp. (TSXV: NRTH) delivered net revenue of $4.8 million marking 48North’s first full year of revenue, but a net loss of $8.1 million. In fiscal 2019, the company raised over $48 million and at the end of the year had $52.7 million in cash and cash equivalents on hand.

Arizona-based DNA testing technology company PathogenDx, Inc. announced $7.5 million in Series B funding. 

And finally HeavenlyRx Ltd. Acquired CBD company PureKana. 


Debra BorchardtDebra BorchardtOctober 3, 2019
canopy3-1280x854.jpg

2min24240

Beverage giant  Constellation Brands, Inc. (NYSE: STZ and STZ.B) stock fell over 6% after the company reported a $484 million write-down on its $4 billion Canopy Growth investment. The cut drove its net loss to $525.2 million, or $2.52 a share, for the quarter to Aug. 31, after income of $1.149 billion, or $5.41 a share, in the year-earlier period. Excluding those charges, the company had per-share earnings of $2.72, ahead of the $2.63 FactSet consensus. Overall for Constellation. the company’s sales edged up 2% to $2.344 billion, meeting the FactSet consensus.

Canopy Growth investors didn’t seem to mind. That stock rose almost 2% and was lately trading at $22.38. This was especially comforting to the cannabis community since these stocks have been in a bear market for most of 2019.

The company had signaled this summer that it was losing its warm and fuzzy feeling towards Canopy when it terminated the CEO Bruce Linton. Linton is widely respected within the cannabis community and the termination was seen as a sign that Constellation was flexing against the smaller cannabis company. In a previous analyst call,

“While we remain happy with our investment in the cannabis space and its long-term potential, we were not pleased with Canopy’s recent reported year-end results,” Chief Executive William Newlands told analysts. “However, we continue to aggressively support Canopy on a more focused long-term strategy to win markets and form factors that matter, while paving a clear path to profitability.”

Having said that Constellation said it has been actively developing a range of CBD products and hopes to bring them to the U.S. market by the end of its fiscal year.

Constellation did note that it was planning on going further into the seltzer category by introducing four new flavors of a Corona-brand product planned for Spring 2020. It was described as being “heavily accretive,” but also as a product that could take beer sales. Wine in a can is also turning into a popular product.

 


Debra BorchardtDebra BorchardtOctober 2, 2019
money4-2.jpg

7min6540

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC)  has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.

BioSteel was founded in 2009 and focuses on premium natural ingredients with a reputation for being the hydration beverage of choice for high-performance athletes. According to the company statement, BioSteel products have been purchased by over 70% of the teams in North America’s four major sports leagues and ambassadors of the brand include: Ezekiel Elliott, of the Dallas Cowboys; Connor McDavid, of the Edmonton Oilers; WTA player, Eugenie BouchardAndrew Wiggins with the Minnesota Timberwolves; Tyler Seguin with the Dallas Stars; Jalen Ramsey, with the Jacksonville Jaguars; NHL Hall of Famer, Wayne Gretzky; Gleyber Torres, with the New York Yankees; and Smiths Falls very own, LPGA golfer Brooke Henderson. In particular, Elliott’s agreement with BioSteel allows them to activate the star running back as the leading endorser of CBD products once permitted by the NFL. To date no active player has been able to do so.

“BioSteel has a reputation for being a best-in-class provider of natural sports nutrition products and all of its products are well positioned to benefit from the increasing trend of plant-based and all-natural products, preferred not only by professional athletes, but active consumers as well,” commented Mark Zekulin, CEO, Canopy Growth. “This acquisition allows us to enter the sports nutrition space with a strong and growing brand as we continue towards a regulated market of food and beverage products that contain cannabis. We view the adoption of CBD in future BioSteel offerings as a potentially significant and disruptive growth driver for our business.”

“The use and acceptance of CBD-based products in the professional sports landscape has changed. We have witnessed the negative effects of prescription painkillers and athletes are looking for healthier alternatives,” said Michael Cammalleri, Co-Founder and Co-CEO, BioSteel Sports Nutrition. “Its presence is already commonplace amongst NHL players and as a regular CBD user myself, I couldn’t be more proud to champion BioSteel’s evolution and leadership in this space.”

In addition, BioSteel has national organizational partnerships with USA Hockey, Canada Basketball, Athletics Canada and the Professional Hockey Players Association. The company has 10,000+ points of distribution in Canada and the U.S. and continues to expand in both markets and into Europe.

Canopy Rivers

Venture capital firm Canopy Rivers Inc.  (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company TerrAscend Corp. (CSE: TER)(OTCQX: TRSSF). The investment includes the purchase of 13,243 units, with each unit consisting of: (i) one unsecured convertible debenture of TerrAscend Canada with a principal amount of CA $1,000, and (ii) 25.2 common share purchase warrants of TerrAscend exercisable until October 2, 2024.

“We think TerrAscend is uniquely positioned to meet the evolving consumer demands in the three largest cannabis markets worldwide,” said Narbe Alexandrian, President & CEO of Canopy Rivers. “We strongly believe in TerrAscend’s ability to execute on its global strategy, market a diversified brand portfolio, and build on its recent acquisitions, and this additional investment is an affirmation of that belief.”

“We are privileged to have the continued confidence and support of Canopy Rivers, one of the preeminent investment firms specializing in cannabis,” said Michael Nashat, CEO of TerrAscend. “This growth capital enables us to accelerate our organic and acquisition-driven investments in our key markets across the globe, as we execute our strategic vision of being a truly global cannabinoid company.”

Canopy Rivers, along with Canopy Growth Corporation, first invested in TerrAscend in November 2017. In October 2018, both parties restructured their investment in TerrAscend. This restructuring enabled TerrAscend to pursue strategic international transactions in the cannabis space while ensuring all parties remained compliant with industry and securities regulations.

The investment was part of a larger raise of approximately $25 million through the issuance of units of each of TerrAscend and TerrAscend Canada Inc. The first tranche of the Canadian Offering was the $10 million lead order from Canopy Rivers Inc. The company expects to close on additional tranches by mid-October 2019


William SumnerWilliam SumnerAugust 15, 2019
daily_hit004-1280x533.png

7min9700

It’s time for your Daily Hit of cannabis financial news for August 15, 2019.

On the Site

Trulieve

Yesterday, Trulieve Cannabis Corp. (OTCMKTS: TCNNF) (CNSX: TRUL) announced the release of its second quarter financial results. Year-over-year, Trulieve’s increased 149% from $23.3 million to $57.9 million. Keeping pace with revenue, operating expenses also rose from $6 million to 14.8 million, representing a 146% increase. Gross profit was $37.6 million, and the gross profit margin was 65%. Adjusted EBITDA was $31.6 million.

Harvest Health & Recreation

Harvest Health & Recreation, Inc. (CSE: HARV) (OTCQX: HRVSF) has reported its financial results for the second quarter, ending on June 30, 2019. Revenue rose from $19.2 million in the previous quarter to $26.6 million, representing an increase of 39%. If one were to include Harvest Health’s completed and pending acquisitions, quarterly revenue would be $78 million.

Money Moves From Aurora Cannabis, Green Growth Brands

Aurora Cannabis Inc.  (NYSE | TSX: ACB) said that it has secured commitments from an expanded syndicate of lenders led by the Bank of Montreal to amend and upsize its existing C$200 million secured credit facility.

Green Growth Brands Inc. (CSE:GGB) (OTCQB:GGBXF) said that it has entered into backstop commitment letters with each of All Js Greenspace LLC, Park Lane Capital Limited, and Chiron Ventures Inc. in which they have committed to subscribe for and purchase up to C$102,796,241 in the aggregate or roughly $77 million of convertible debentures to support the Company’s operations and capital needs.

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) stock dropped over 10% after the company announced its financial results for the first quarter ending June 30, 2019. The worst of the news in the release was that the company’s fiscal first-quarter net losses of C$1.28 billion, or C$3.70 a share, dwarfed last year’s losses of C$91 million, or 40 cents a share. The loss was attributed to a non-cash charge of $1.2 billion in Canopy’s extinguishing warrants related to the Constellation Brands Inc. (NYSE: STZ) investment.

In Other News

Vireo Health

Vireo Health International, Inc. (CNSX: VREO) (OTCQX: VREOF) announced that its affiliate, Ohio Medical Solutions (OMS), has been granted a Certificate of Operation by the Ohio Department of Commerce. OMS, which was previously granted a provisional processing license, will begin operations immediately. The license will allow OMS to purchase plant material from cultivators and manufacture Vireo-branded medical cannabis products.  “We are delighted that Ohio Medical Solutions will begin manufacturing Vireo products for the benefit of Ohio patients,” said Vireo CEO, Kyle Kingsley, M.D. “The City of Akron has been great to us and as our business grows, we look forward to continuing to create new jobs and make a positive impact on the local economy.”

Front Range Biosciences

Front Range Biosciences (FRB) announced that it has entered a collaborative licensing agreement with Steep Hill, and that it will acquire Steep Hill’s Genomics Research & Development team. The agreement will help accelerate FRB’s marker-assisted breeding program and develop new traits and varieties of hemp and cannabis. “The Steep Hill R&D team is among the top three cannabis genomics groups in the world, and we are very excited to welcome them to FRB,” said Dr. Jonathan Vaught, CEO and Co-Founder of FRB. “This acquisition is a major value inflection point for FRB…”

Medical Marijuana Inc.

Medical Marijuana Inc. has filed its financial results for the second quarter. Revenue rose 30.8% to $20.7 million. Gross profit was $15.4 million and adjusted EBITDA was $1.5 million. General and administrative expenses decreased from 21% of sales in Q2 2018 to 16% of sales revenue. “We are excited to continue our tremendous sequential success with the second quarter of 2019 proving to be the largest sales revenue quarter in the history of our Company,” said Dr. Stuart Titus, CEO of Medical Marijuana, Inc. “As the world continues to become more receptive to learning about the benefits of hemp-derived CBD, we are enthusiastic about being at the forefront of the global cannabis industry which, according to Arcview Market Research, could be worth $57 billion by 2027.”


Debra BorchardtDebra BorchardtAugust 15, 2019
canopy2.jpg

7min7640

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) stock dropped over 10% after the company announced its financial results for the first quarter ending June 30, 2019. The worst of the news in the release was that the company’s fiscal first-quarter net losses of C$1.28 billion, or C$3.70 a share, dwarfed last year’s losses of C$91 million, or 40 cents a share. The loss was attributed to a non-cash charge of $1.2 billion in Canopy’s extinguishing warrants related to the Constellation Brands Inc. (NYSE: STZ)  investment.

“The Company has two primary objectives as we complete Q1 2020 and look to the remainder of the fiscal year,” said Mark Zekulin, CEO, Canopy Growth.  “First, 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.  Second, 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.”

The company reported that its gross revenue in the medical market was $23.6 million, of which $16.4 million dollars or 70% of gross medical revenue was generated by oil sales. Oil sales in the medical market include sales by subsidiary C3, as well as the company’s traditional finished oils and softgels.  Dried flower sales accounted for $7.2 million dollars of gross medical revenue. When it came to adult-use sales, Canopy delivered gross revenue of $60.8 million from the sale of dry flower format products in the Canadian recreational market, representing an increase of 88% from dried flower sales in Q4 2019. Included in dried cannabis sales in Q1 2020 are sales of 1.4 million higher-margin, pre-rolled cannabis products which represented $9.7 million – or 16% – of our total recreational cannabis revenue.

Gross Margins Fall

Last year’s first-quarter gross margins were $11.1 million or 43% of net revenue. This year the gross margins were $13.2 million or 15% of net revenue. The company blamed that drop on the impact of operating costs of $16.2 million relating to facilities not yet cultivating cannabis or producing cannabis-related products, or which had an under-utilized capacity that resulted in adjustments related to the net realizable value of inventory.  “Additionally, there was a shift in product mix in Q1 2020 away from higher-margin, advanced manufactured products due to inventories evening out.”

Expenses Mushroom

The adjusted EBITDA in Q1 2020 accounted for a loss of $92.0 million, as the company said it reflected continuing losses in core operations in Canada and Europe. The company had a laundry list of reasons why the expenses had risen:

  • Increase in sales and marketing expense in Q1 2020 primarily due to increased staffing as it builds-out the network of Tweed and Tokyo Smoke-branded retail stores in Canada
  • Increased number of employees in our marketing and sales functions supporting domestic and international markets
  • Investing ahead of revenue to prepare for marketing campaigns for the launch of the second phase of recreational cannabis consumer products in Canada, as well as CBD products in the United States, both expected later this year.
  • Increase in research and development expense in Q1 2020 over Q1 2019 was due to Canopy Growth’s investment in new research and development efforts. Costs associated with hiring advanced degree researchers and engineers, in areas of vape R&D, plant genetics, applied technology and cannabis-based medical therapy clinical research.
  • Increase in costs associated with enhancing our finance and information technology capabilities, higher public company compliance and regulatory requirements, and administrative costs associated with expanding our operations.
  • Acquisition-related costs in Q1 2020 increased significantly over Q1 2019 due to higher merger and acquisition activity during the current period, most notably entering into and implementing the plan of arrangement with Acreage and closing the acquisitions of C3 and This Works
  • Increase in share-based compensation expense is primarily attributable to the continued increase in the number of stock options granted to employees, which is primarily related to the increase in the number of employees of the Company from approximately 1,400 at June 30, 2018, to approximately 3,850 at June 30, 2019.

Life After Linton

Mark Zekulin was appointed as the company’s sole Chief Executive Officer and Rade Kovacevic was appointed President of the Company upon the termination of Bruce Linton as Co-Chief Executive Officer of the Company. A search has begun to find Mr. Zekulin’s replacement as the company’s Chief Executive Officer. The stock went into a tailspin after Linton’s public dismissal and had only just begun to recover when the earnings were announced following the close of trading on Wednesday.


William SumnerWilliam SumnerJuly 23, 2019
stock-1863880_640.jpg

3min10270

Amplify Investments is getting into the cannabis industry. Today, Amplify ETF’s announced the launch of Amplify Seymour Cannabis ETF (NYSE Arca: CNBS), an actively managed ETF covering the cannabis industry. Tim Seymour, CIO of Seymour Asset Management and CNBC Fast Money co-host, will act as the fund’s portfolio manager.

As one of the world’s most premier financial journalists, Seymour recently served as the headline speaker for the Green Market Summit in Chicago, Illinois. You can watch his fireside chat with Peter Miller, CEO of Slang Worldwide Inc. (SLGWF), about the explosive growth of the cannabis industry here.

“The global legal cannabis industry is still very much in its infancy and presents an attractive growth opportunity for investors looking to capitalize on this emerging frontier,” Seymour said. “Amplify has a track record of offering investors access to disruptive areas of the market via the ETF structure, and the cannabis industry certainly fits this mold.”

As portfolio manager, Seymour will base his decisions off of publicly available data, regulatory filings, third party research, and his evaluations of companies’ financial fundamentals.

The CNBS portfolio will include cannabis companies that are federally legal in the countries in which they operate. Specifically, the portfolio will cover companies that fall into one of three categories: cannabis/hemp plant, support cultivation and retail, and ancillary companies that provide goods and services to the cannabis industry.

Another qualification is that at least 80% of the companies in the ETF must receive 50% or more of their revenue from the hemp or cannabis industry. The fund portfolio currently covers 25 of the cannabis industry’s leading companies; such as Aurora Cannabis (NYSE: ACB), Canopy Growth (NYSE: CGC), Hexo Corp. (NYSE: HEXO), Tilray (NASDAQ: TLRY), and WeedMD (OTCMKTS: WDDMF)

“Cannabis and hemp are seeing a new wave of potential use cases across multiple industries, and investors are eager to gain access to this emerging sector,” said Christian Magoon, founder and CEO of Amplify ETFs. “Tim is a recognized voice and active investor in the cannabis space, and we’re excited to harness his investment expertise and specialized insights to navigate and capture the expanding opportunity in the rapidly evolving industry.”


Debra BorchardtDebra BorchardtJuly 3, 2019
Canopy4.png

4min21850

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) Co-CEO Bruce Linton said he was stepping down leaving Mark Zekulin as the sole CEO while the company begins a search for a new top executive. The company said it would consider both internal and external options. Rade Kovacevic, who currently heads up all Canadian operations and recreational strategy will assume the role of President. These changes are effective immediately.

“Creating Canopy Growth began with an abandoned chocolate factory and a vision,” said Linton. “The Board decided today, and I agreed, my turn is over. Mark has been my partner since this Company began and has played an integral role in Canopy’s success. While change is never easy, I have full confidence in the team at Canopy – from Mark and Rade’s leadership to the full suite of leadership – as we progress through this transition and into the future.”

The move comes as a surprise as Linton has been the face of Canopy for years. That Linton stated that the board decided suggests it wasn’t his decision. His biography was also immediately removed from the company’s homepage.

“We thank Bruce and Mark for establishing the foundation for a company that is very well-positioned to lead in the emerging global cannabis market,” said Canopy Growth board director, David Klein. “We are also excited to embark upon our next phase of growth as global leader in the cannabis industry.”

Canopy Growth said in its statement that it has experienced rapid growth since being founded in 2013, establishing leading positions in Canada’s medical and recreational cannabis markets and building an emerging presence in a number of additional markets around the world. The company recently received a C$5 billion investment from Constellation Brands (STZ), a leading beverage alcohol company, which provides a significant benefit as Canopy continues to establish a first-mover advantage in the quickly evolving global cannabis market.

“While Canopy will never be the same without Bruce, the team and I look forward to continuing to do what we have done for the past 6 years: investing in world-class people, infrastructure and brands, and always seeking to lead through credibility and vision,” said Zekulin. “I personally remain committed to a successful transition over the coming year as we begin a process to identify new leadership that will drive our collective vision forward. I know the company will continue to thrive as the Canopy story continues on for years to come.”

The Board has also appointed John Bell as its Board Chair, to be reviewed at the Board’s annual meeting in September when new board members are elected. Bell has served on the board as lead director for 5 years. Bell is the Chairman of Onbelay Capital Inc., a Canadian based private equity company.  Mr. Bell is also director of Strongco Corporation (TSX: SQP) and the Royal Canadian Mint (TSX: MNT). He was also on the board at Canopy Rivers (RIV).


William SumnerWilliam SumnerJune 26, 2019
daily_hit004-1280x533.png

4min10870

It’s time for your Daily Hit of cannabis financial news for June 26, 2019.

On the Site

Canopy Growth

Canopy Growth Corporation (TSX: WEED, NYSE: CGC)  has acquired Saskatoon-based bio-product extractor KeyLeaf Life Sciences. Canopy Growth said it has been working closely with KeyLeaf – formerly known as POS Bio-Sciences – as a trusted partner building out extraction processes and technology for the past year as it refines its scale extraction model for Canadian and global markets.

Executive Spotlight: Corey Mangold, Co-Founder & CEO of Orchid Essentials

No stranger to entrepreneurship, Corey Mangold started his first company at the young age of 18. Even in his teens, he understood the great risk, and potential reward of going into business for yourself and accepted that challenge head-on.

In Other News

GrowGeneration Corp.

GrowGeneration Corp. (OTCQX: GRWG) announced that it had raised $12.8 million in an upsized private placement offering, issuing 4,123,254 shares at a price of $3.10 and 2,061,632 warrants exercisable at $3.50 per share. All the company’s strategic institutional investors participated in the offering. “With the completion of our oversubscribed offering, the Company now has over $16 million of cash on the balance sheet to execute on multiple acquisitions, with several planned to close in the 3rd and 4th quarters of 2019,” said Darren Lampert, Co-Founder and CEO of GrowGen.

Fire & Flower Holdings Corp.

Fire & Flower Holdings Corp. (TSXV: FAF) announced the closing of a private placement offering. Selling 27,188 convertible debenture units at a price of $1,000 per unit, the company raised $27.18 million. The company also announced its financial results for the three-month period ending on May 4, 2019. Recognized revenue was $9.5 million, with a gross margin of 38.5%. The net loss for the period was $17.1 million. “These results provide a solid foundation upon which Fire & Flower will continue to execute on our growth strategy. Our growth plan is well funded and in addition to the strength of our retail network, we have set ourselves apart as a modern retail company through the Hifyre digital cannabis platform that is reflective in our financial performance” commented Fire & Flower CEO Trevor Fencott.


Debra BorchardtDebra BorchardtJune 26, 2019
canopy3-1280x854.jpg

3min13310

Canopy Growth Corporation (TSX:WEED, NYSE:CGC)  has acquired Saskatoon-based bio-product extractor KeyLeaf Life Sciences. Canopy Growth said it has been working closely with KeyLeaf – formerly known as POS Bio-Sciences – as a trusted partner building out extraction processes and technology for the past year as it refines its scale extraction model for Canadian and global markets.

“The KeyLeaf operations and team deliver instant scale at a pivotal stage in our growth, with brand new products coming to market later this year requiring sophisticated extraction capabilities at scale,” said Bruce Linton, Chairman & co-CEO, Canopy Growth Corporation. “This acquisition is the result of a year’s worth of work with a trusted partner, and part of our commitment to always staying a step ahead as leaders in a nascent industry, focused on the long-game one piece at a time.”

KeyLeaf has been working closely with Canopy Growth over the past year to retrofit its Saskatchewan facility to advance technology development and commercialization, in order to process hemp and cannabis biomass, and to conduct pre- and post-extraction processes.  It is anticipated the facility, which is currently in the Health Canada licensing process, will be able to process up to 5,000 kg of input materials daily when operational.

Canopy Growth said that it intends to leverage this facility, along with other owned and partner extraction options, to process its over 5,000 acres of Canadian CBD hemp production, over 160 acres of outdoor cannabis production, as well as any extraction materials outputted from its over 4 million square feet of greenhouse growing operations.  Then it’s off to Smiths Falls to produce the best possible, IP-protected products out there!

Back in November 2018, Canopy Growth assumed control of KeyLeaf for accounting purposes. This meant that KeyLeaf’s financial results were consolidated in the Canopy’s fiscal 2019 financial statements. Through the transaction, Canopy is buying a large-scale Canadian extraction facility as well as an extraction-related facility in the United States to support its U.S. CBD expansion.


Debra BorchardtDebra BorchardtJune 21, 2019
canopy3-1280x854.jpg

6min29950

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) announced its financial results in Canadian dollars for the fourth quarter and fiscal year ended March 31, 2019, with annual net revenue growth rising 191% to $226.3 million. Net revenue rose 313% to $94.1 million.

The net loss for the quarter as $323.4 million and earnings per share for the fourth quarter was -$0.98 which missed analysts estimates by $0.66 causing the stock to fall over 6% in early market trading. This compares to a net loss of $54.4 million or $0.31 per share for the same time period last year.

In addition to the earnings miss, the company noted that its adjusted EBITDA came in at a loss of $257.0 million in fiscal 2019 versus a loss of $36.1 million for 2018. The company attributed the year-over-year loss to the investments made in fiscal 2019 sales and marketing and general and administrative costs.

The average selling price per gram fell 11% from $8.43 last year to $7.49 in this year’s fourth quarter. Although the company did report that medical prices rose 2% and international prices rose 4% for the same time period.

In addition to the losses, sales declined as well on a sequential basis. Gross adult use cannabis sales in the quarter fell 4% to 68.9 million from the third quarter. Medical marijuana dropped 41% from the third quarter to the fourth quarter’s $11.6 million Canopy said this was due to a product transition for Tweed, DNA Genetics, LBS and certain CraftGrow partners to the recreational channel. The company says it has been remedied.

International medical sales generated revenue of $10.1 million in fiscal 2019, but this category’s gross revenue of $1.6 million in the fourth quarter fell 25% year-over-year. Canopy said that “European sales were negatively impacted by supply challenges in Canada, with the company prioritizing its Canadian customers.”

On a positive note, sales of Storz & Bickel vaporizer devices, along with revenue from other strategic sources including extraction services, and clinic partners, resulted in $34 million in other revenue generated in fiscal 2019 giving the sale line a nice extra boost.

“The fourth quarter wraps up a historic year with major steps taken in Canada to build-out our national platform while scaling all of our processes to bring cannabis to market. The third quarter of the year benefitted from months of advanced production while the fourth quarter relied more on efficient throughput and a more automated platform,” said Bruce Linton, Chairman, and Co-CEO of Canopy Growth. “With more product formats coming to the Canadian market later in the year, we are working hard to ensure that we are ready to hit the ground running with products, formats, and brands that Canadians trust.”

Even with these negatives, Canopy remains the cannabis company with the largest market share in Canada. It is also sitting on $4.5 billion as of March 31, 2019, in cash and cash equivalents.  Canopy doubled its harvest size from the fiscal third quarter of 2019 to the fiscal fourth quarter of 2019, and it expects to do so again as it moves from the fourth quarter to the first.

Spending Money To Make Money

The sales and marketing increased from $38.2 million  to $154.4 million as the company invested in brand-building, consumer marketing, and promotional campaigns for the Tweed, Tokyo Smoke, Spectrum Therapeutics, active partner brands, as well as the development of cannabis and CBD consumer products and brands expected to be launched towards the end of fiscal 2020.

The company said that general and administrative expenses in fiscal 2019 were $168.5 million, reflecting the ongoing investments in building commercial capacity, governance and public company compliance costs associated with TSX and NYSE listings, legal and professional services in expanding operations.

The statement said that acquisition-related expenses were $23.4 million in fiscal 2019, with Canopy Growth closing on several transactions in the year including the acquisition of HIKU Brands Company Ltd., ebbu, Inc., Storz & Bickel GmbH & Co. KG, and Canopy Health Innovations Inc. Acquisitions announced subsequent to fiscal 2019 – including This Works Products Limited, Canamo y Fibras Naturales, S.L., and the future acquisition of Acreage – incurred related expenses throughout fiscal 2019 as well.

Canopy and Acreage shareholders approved of the merger this week.



About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 1 hour

$ZYNE ⁦@ZynerbaPharma⁩ Stock Lifts After Positive Study Results For #MedicalMarijuana…

@GreenMarketRpt – 1 day

$AHPA ⁦@aphriainc⁩ Leaves ⁦@NYSE⁩ , Moves To ⁦@Nasdaq⁩ $ICE $NDAQ

@GreenMarketRpt – 5 days

Green Market Report’s Marijuana Money May 22, 2020

Back to Top

You have Successfully Subscribed!