Canopy Growth Corp CGC, the largest cannabis company in Canada, reported fiscal third-quarter earnings after the close Thursday evening, with net revenue that rose 283 percent to CA $83.048 million ($62.4 million) year-over-year.
What Happened
Canopy's net revenue — after excise taxes of CA $14.655 million — rose 256 percent from the $23.327 million the cannabis company posted in the second quarter.
Canada legalized adult-use cannabis nationwide Oct. 17, 2018.
Canopy's pre-excise tax revenue of CA $97.7 million surpassed analyst expectations of $90 million.
Moreover, Canopy reported net income of CA $74.86 million, or CA $0.22 per basic share.
On a diluted basis, the company posted a net loss of CA $121 million, or CA $0.38 per share, due to the dilutive impact of convertible debt. For the second quarter, Canopy reported a net loss of CA $330.6 million, or CA $1.56 per share.
Canopy sold 10,102 kilograms and kilogram equivalents during Q3, which represents a 360-percent increase over the second quarter.
Out of this amount, 8,288 kilograms and kilogram equivalents were sold to the recreational market, with 89 percent sold directly to provinces and the rest through direct retail and online.
During the same period, Canopy harvested 7,556 kilograms, down from 7,961 kilograms in the prior quarter.
Canopy Growth saw a lower average sales price per gram of CA $7.33 (net of excise tax), down from CA $9.87 in the second quarter. The lower price was due to a higher amount sold to B2B markets.
Why It's Important
As the largest cannabis company, Canopy Growth sets the tone for the industry, and metrics such as revenue growth and cost to produce allow analysts to evaluate the health of the cannabis market in Canada.
Canopy Growth shares closed Thursday at $46.12.
The company's Q3 conference call is scheduled for 8:30 a.m. ET Friday.
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