Canopy Growth reported a net Q1 non-cash loss of $1.28B, along with net revenue of $90.5M, down from an already weak $94.1M the previous quarter. Analysts expected $109M or more in revenue. The company acknowledged it remains three to five years away from profitability.
Globe and Mail
- The loss was connected with the extinguishment of $1.2B in warrants held by Constellation brands. In late June, Canopy and Constellation restated terms of their investment agreement, extending some warrants, replacing others, and generating the loss.
- High expenses and operational costs contributed to losses.
- Last Q1, Canopy reported only a $91M loss.
The company increased its dry-flower sales by 94% over the quarter.
- Ousted co-founder Bruce Linton bought Canopy stocks during what he called "this August sale."
- With Linton out, Canopy's headquarters of Smith's Falls, Ontario wonders how long the company will continue to operate in the small town Linton championed.
Canopy released interim CEO Mark Zekulin's remarks in full. He reiterated the company strategy of building out its CBD platform in the US and aiming to acquire Acreage in full upon US legalization, and predicted the company would hit its $1B annualized revenue target by March, 2020.
- Canopy partner Acreage Holdings plans to open Tweed-branded REC stores in California.
- The company harvested 40,960 kilos in the three months ending June 30, the largest quarterly harvest ever by a Canadian LP. Between January and March, the company only harvested 14,500 kilograms.
- Quarterly results included an $8M gross revenue adjustment related to "oversupply of certain oil and gel-cap formats in certain markets." REC retailers reported Canopy's Tweed brand REC oils and gel-caps are "just not selling."
The first ousted Canopy co-founder, Chuck Rifici (now CEO of Auxly Cannabis), reported he and Canopy have dropped their claims/counterclaims over his dismissal.