Market Overview

Canopy Growth Implements Renewed Strategy As Revenue Climbs 22%

Share:
Canopy Growth Implements Renewed Strategy As Revenue Climbs 22%

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) disclosed its net revenue rose by 22% year over year, reaching CA$110 million (US$82 million) in the first quarter of fiscal 2021.

The revenue growth can be attributed to higher medical cannabis sales in Canada and Germany, as well as Storz & Bickel vaporizer sales and the full quarter contributions of its acquired businesses.

Canopy acquired German cannabis company C3 for $253 million, and This Works for about $74 million.

Canopy CEO David Klein said Monday they are "proud of our strong first-quarter performance, despite unprecedented volatility and uncertainty in the market and across the globe."

Canopy is implementing a "renewed corporate strategy" alongside a new leadership team, that way positioning its business for "continued growth," added Klein.

Moreover, over the quarter, the Smith Falls, Ontario-based company strengthened its position in the cannabis-infused beverage segment.

Canopy has been expanding its presence in the market, following the purchase of Ebbu, an infused technology company from Colorado, for $297 million in 2018.

Meantime, here's what the company's latest earnings report revealed:

  • Gross margin of 6%, a year-over-year decrease of 1,400 bps.
  • Adjusted gross margin (excluding inventory step-up costs) of 7%, a drop of 1,300 bps compared to the first quarter of fiscal 2020
  • Total SG&A expenses decreased by 23% over a year
  • Sales & Marketing expenses declined by 25% during the same period
  • G&A and R&D expenses rose by 2% and 61%, respectively
  • Net loss of $128 million, up by 34% compared to the same quarter last year
  • Negative adjusted EBITDA of CA$92 million, versus a loss of CA$93 million in the corresponding quarter of fiscal 2020
  • Cash and Short-term Investments were CA$2.0 billion
  • Canadian medical revenue rose 19% year-over-year
  • Recreational B2C and B2B net sales in Canada declined by 12% and 10%, respectively

Quarterly Highlights

Other quarterly highlights include the launching of e-commerce site ShopCanopy, expansion of S&B vaporizer product distribution in the U.S., and final preparations for the introduction of Martha Stewart branded health and wellness CBD products, to name a few.

Mike Lee, the company's CFO, explained they are "focused on further optimizing our operating footprint through a full end-to-end strategy that looks at people, process, technology, and infrastructure that we believe will lead to best in class margins over time." 

Courtesy photo

 

Related Articles (CGC)

View Comments and Join the Discussion!

Posted-In: cannabis industry cannabis salesCannabis Earnings M&A News Best of Benzinga

Cannabis Movers