Shares of Canopy Growth (TSX:WEED; NYSE:CGC) slipped before Wednesday’s opening bell after the Canadian cannabis company posted a widening of its losses in its fiscal second-quarter and revenue that missed Wall Street’s estimates.
For the three months ended on September 30, Canopy’s net loss came to C$330.61 million, or $1.52 per share, compared with a loss of $1.61 million or $0.01 per share in the corresponding period last year. The company said that $115.7 million in expenses accounted for $0.52 of the reported $1.52 loss in the quarter.
Its revenue, meanwhile, came in at $23.3 million, falling short of the consensus estimate of $59 million.
Disappointed by the results, investors sent Canopy Growth shares down 8.5% to $35.22 in pre-market trading.
Sales of oils, including Canopy’s softgel capsules, accounted for 34% of its product revenue, up from 18% in the corresponding period last year.
During the quarter, Canopy sold 2,197 kilograms and kilogram equivalents of cannabis at an average sale price of $9.87, up from 2,020 kilograms and kilogram equivalents at an average price of $7.99 in the prior year period. Kilograms of cannabis produced from harvests, meanwhile, soared 265% to 15,127.
"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," chairman and co-CEO Bruce Linton said in a statement.
"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," Linton added.
The company ended the second quarter with supply commitments to Canada’s provinces and territories of 70,000 kg, not including Ontario.
During the quarter, Canopy was on the receiving end of a $5 billion investment from the US beverage company and maker of Corona beer Constellation Brands, which closed subsequent to the quarter. The funds will be spent on intellectual property development and replicating Canopy’s Canadian platform across a number of international markets.
Contact Ellen Kelleher at [email protected]