Canopy Growth Shares Stunted After Reporting Major Revenue Miss

Shares of Canadian cannabis company Canopy Growth Corp (NYSE:CGC) were down more than 8 percent Wednesday morning after certain aspects of the company's fiscal second-quarter earnings report disappointed against some of the most conservative estimates, Business Insider reported.

What Happened

Canopy Growth said it lost 1.52 Canadian dollars per share — the U.S. dollar equivalent of $1.15 — in the fiscal second quarter on revenue of CA$23.327 million. Other notable items from the report include: 

• Active registered patients rose 34 percent from a year ago to 84,400.
• Kilograms and the kilogram equivalent sold rose 9 percent to 2,197.
• Kilograms harvested rose 265 percent to 15,127.
• The average selling price per gram rose 24 percent to $9.87.
• Inventory and biological assets rose 76 percent to $171 million.
• The company made "limited test shipments" to recreational channels.
• The company ended the quarter with supply commitments in Canada (excluding Ontario) of 70,000 kg.
• The company started shipping value-added products like Softgels capsules.

Why It's Important

Revenue during the second quarter fell well short of the consensus estimate of CA$59.1 million. 

What's Next

Canopy Growth's combination of inventory, new products, increased demand from physical retail stores and growing internal and channel efficiencies position it well to command a "significant and sustainable" market share in Canada, CEO Bruce Linton said in a statement. The company continues to eye the U.S. market and is prepared to expand "when it is federally permissible to do so," he said. 

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