Canopy Growth Shares Take A Beating After Revenue Misses By A Wide Mark

Canopy Growth

Canopy Growth Corp (NYSE: CGC)

Canopy Growth investors are bracing for a rough day when markets open on Wednesday after the marijuana grower posted second-quarter revenue and a net loss that missed Wall Street expectations by a huge margin.

New York-traded shares of the company lost more than 9% to $34 in premarket trade, having closed Tuesday’s session at $38.48.

Earlier this year, liquor giant Constellation Brands amassed a nearly 40% stake in Canopy Growth, triggering a frenzy of activity in the cannabis industry.

CGC Earnings & Outlook

During the three months to Sept. 30, 2018, Canopy Growth generated revenue of 23.3 million Canadian dollars, missing FactSet expectations by C$35.8 million. The pot producer posted a net loss of $330.61 million Canadian dollars, or $1.52 per share, compared with a net loss of C$1.61 million, or $0.01 per share, in the prior-year period. Adjusted EBITDA loss totaled to C$57.7 million, compared with analysts’ estimates of C$23.7 million loss.

Oils accounted for 34% of its product revenues, versus 18% in the comparable period last year. The company sold 2,197 kilograms of cannabis, up 9%, while kilograms harvested came to 15,127, a rise of 265% from the same period in fiscal 2017. Its average selling price of $9.87 per gram represented a 24% rise.

Canopy Growth CEO Comments

“With extensive investments over the past year, including most notably in the second quarter, in branding and retail development, our entrance into the retail cannabis market has been a success with our SKU assortment obtaining over 30% listings market share in multi-store physical retail store networks nationwide. With substantial product inventories on hand, new product formats coming to market as planned, a captive sales force driving increased demand through physical retail stores and increasing internal and channel efficiencies, we believe based on market conditions today that we will attain significant and sustainable market share of the Canadian recreational market,” said Bruce Linton, Chairman & Co-CEO, Canopy Growth.

Canopy Growth Corp Profile

Canopy Growth Corp., together with its subsidiaries, engages in growing, possession, and sale of medical cannabis in Canada. Its products include dried flowers, oils and concentrates, softgel capsules, and hemps. The company offers its products under the Tweed, Black Label, Spectrum Cannabis, DNA Genetics, Leafs By Snoop, Bedrocan Canada, CraftGrow, and Foria brand names.

It also offers its products through Tweed Main Street, a single online platform that enables registered patients to purchase medicinal cannabis from various producers across various brands. The company was formerly known as Tweed Marijuana Inc. and changed its name to Canopy Growth Corporation in September 2015. Canopy Growth Corporation is headquartered in Smiths Falls, Canada. – Yahoo Finance