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Better Than Expected Earnings Boost Canopy Growth Corp (NYSE: CGC)

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Canopy Growth Corp (NYSE: CGC) saw a significant rise topping over 15% at one point after the Company announced on Friday better than expected earnings. CGC reported it generated $124 million in net revenue for Q3 2020, up from $76 million in Q2 2020. CGC reported a net loss of C$124.2 million ($93.8 million), or 35 cents a share, after net income of C$74.9 million, or a loss of 38 cents on a per-share basis. This beat the FactSet consensus.

CGC CEO David Klein commented “In Q3 we executed across Canada, in our international markets and in our strategic acquisitions to drive revenue growth. We have a lot of work to do. We are eager to capitalize on the opportunity to create an unassailable position through a tight focus on the consumer and on critical markets.”

“We delivered significant gross improvement in the third quarter driven by stronger revenues and higher capacity utilization. Actions taken earlier this year are expected to meaningfully reduce stock-based compensation in FY21, and we have started to implement tighter cost controls across the organization,” said Mike Lee, EVP & CFO. “We plan to take further steps to reduce our costs and right-size our business to ensure that we can generate a healthy margin profile and cash generation in the coming years.”

Canopy Growth (TSX:WEED,NYSE:CGC) is a world-leading diversified cannabis, hemp and cannabis device company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms, as well as medical devices through the Company’s subsidiary, Storz & Bickel GMbH & Co. KG. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The Company has operations in over a dozen countries across five continents.

The Company’s medical division, Spectrum Therapeutics is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public’s understanding of cannabis, and has devoted millions of dollars toward cutting edge, commercializable research and IP development. Spectrum Therapeutics sells a range of full-spectrum products using its colour-coded classification Spectrum system as well as single cannabinoid Dronabinol under the brand Bionorica Ethics.

The Company operates retail stores across Canada under its award-winning Tweed and Tokyo Smoke banners. Tweed is a globally recognized cannabis brand which has built a large and loyal following by focusing on quality products and meaningful customer relationships.

Canopy Growth has established partnerships with leading sector names including cannabis icons Snoop Dogg and Seth Rogen, breeding legends DNA Genetics and Green House Seeds, and Fortune 500 alcohol leader Constellation Brands, to name but a few. Canopy Growth operates eleven licensed cannabis production sites with over 5.2 million square feet of production capacity, including over one million square feet of GMP certified production space.

Microcapdaily has been covering Canopy Growth for years and we noted on October 19, 2016 – CANOPY GROWTH CORP COM NPV(OTCMKTS:TWMJF) has seen a fast rise in recent months off its base just over $2 a share to recent highs over $5 as pot stock heat up across the board. TWMJF got a recent boost after their subsidiary Tweed, announced it was launching a suite of products in partnership with legendary rapper-turned-businessman Snoop Dogg. TWMJF operates in the red hot Marijuana industry that has quickly turned into a multi-billion dollar massive growth market that is sweeping across the US and Canada with many new states legalizing the drug including Oregon and California likely next. Medical marijuana products in the U.S. alone are projected to generate an estimated $30-35 Billion in revenue by 2020.

On January 17 CGC announced it has submitted its final documentation for its beverage facility to Health Canada in late June 2019 and subsequently received the licence in late November 2019. In the seven weeks since receiving the licence, the Company has made meaningful progress towards scaling the production process for its cannabis beverages from lab scale to commercial scale. Management remains very confident in the underlying beverage science and in its ability to scale production and deliver high quality, differentiated cannabis beverages to the market. However, the scaling process is not complete and the Company is extending its to-market date while the internal teams complete the final steps.

“Canopy has had seven weeks to work with THC in the brand new beverage facility to scale processes and IP it has developed in the R&D environment,” said David Klein, CEO, Canopy Growth. “In order to deliver products that meet our customer’s high standards we are electing to revise the launch date while we work through the final details.”

Microcapdaily noted on Canopy Growth when it was in its infancy – Currently trading at a $450 million market valuation and running up the charts TWMJF has $14.7 million in the treasury as well as $23 million in total assets. TWMJF is an exciting story developing in the Canadian legal Marijuana industry; the Company is the largest Marijuana producer in Canada and with global ambitions and the recent partnership with Snoop Dogg gives them substantially more visibility. TWMJF is a must own stock for Investors in pot stocks. We will be updating on Canopy Growth when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with Canopy Growth.

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Disclosure: we hold no position in Canopy Growth either long or short and we have not been compensated for this article.

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