Solid third quarter for Canopy Growth
February 15, 2017 By Dave Harrison
Feb. 15, 2017, Smiths Falls, Ont. – Canopy Growth Corporation has reported a number of gains in its third quarter report of fiscal year 2017, the period ended Dec. 31, 2016.
Consolidated financial results include the accounts of the Company and its wholly‑owned subsidiaries which include Tweed Inc., Tweed Farms Inc., and Bedrocan Canada Inc. and its investments in affiliates.
• The company had over 29,000 registered patients at Dec. 31, 2016 compared to over 8,000 at Dec. 31, 2015, representing a greater than 260 per cent increase.
• Revenue of $9.8 million; a 15 per cent increase over second quarter fiscal year 2017 and a 180 per cent increase over the prior year period.
• Revenue growth limited by the available product mix for sale; supply was limited in the quarter by the company’s rigorous procedures to fully test the record harvest and approve the extensive product released for sale subsequent to quarter end.
• Harvested a company record 5,264 kilograms compared to 1,711 kilograms in the second quarter fiscal year 2017, representing a 208 per cent increase.
• Inventory at Dec. 31, 2016 valued at $50.6 million comprised of 8,375 kilograms of dry cannabis and 2,683 litres of cannabis oils, providing a strong base for growing demand and continue growth. Of the total dry cannabis on hand, less than 10 per cent was available for sale during and at the end of the quarter to address the demand for THC/CBD varieties and price points.
• Net income of $3.0 million compared to a net loss of $3.3 million in the prior year period.
• Acquired Quebec-based ACMPR license applicant Vert Cannabis (formerly Vert Médical) and majority stake in licensed hemp producer HEMP.ca.
• Acquired German licensed medical distributor MedCann GMBH.
• Closed bought deal financing that raised gross proceeds of $60 million.
• $92.5 million in cash and cash equivalents at quarter end.
SUBSEQUENT TO THIRD QUARTER FISCAL 2017
• Acquired 472,000 square foot and 42-acre property at 1 Hershey Drive, Smiths Falls, Ontario on Jan. 13, 2017.
• Closed acquisition of Mettrum Health Corp. (“Mettrum”) on Jan. 31, 2017.
• Changed TSX trading symbol from CGC to WEED on Feb.1, 2017.
“The third quarter provided new opportunities and challenges for our business, with demand largely exceeding supply throughout the quarter,” said Bruce Linton, chairman and CEO.
“A function of our growing patient base, the time required to move from a record harvest to sale, and an extensive phenotyping exercise to establish breeding stock and further elevate our product offering all resulted in constrained product available for sale during the quarter.
“The successful late-quarter harvest of the Tweed Farms facility running at full capacity has begun to ease supply constraints while at the same time we have introduced a new diversity of product into our online store under the Tweed, Leafs By Snoop and DNA Genetics banners, driving strong sales this month.”
He added that the recent release of the company’s first wave of new genetics and Tweed Farms products resulted in one million dollars of store sales in a single day, on Feb. 1.
“That is a major milestone for Canopy. Two years ago, we had our first million-dollar quarter, a year ago we had our first million-dollar month, and now we have had our first million dollar day. It’s definitely trending well.”
The company, he added, “continued to push the boundaries of our business during the quarter through multiple strategic accomplishments that will help drive our future growth. We worked to strengthen our market position in Canada with our move to acquire Mettrum and the acquisition of Vert Cannabis to establish a unique brand presence in Quebec.
“We also established a base of operations in Germany, a strategic future market for Canopy, with the purchase of cannabis distributor, MedCann GMBH.”
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