Canopy Growth’s Shareholders get a massive Buzzkill after Q2 earnings report   

14 November 2018 : Looks like Canopy Growth’s 5-minutes of fame has sinked faster than the titanic. Canopy Growth reported its second-quarter earnings yesterday. Sadly, the revenue missed even the lowest estimate by a wide margin. Consequently, the shares got whacked and have already fallen more than 7 % today. 

The net blow received for the quarter ending Sept. 30 was C$330.61 million, or $1.52 a share, after a loss of C$1.61 million, or 1 cent a share in the same period a year ago.Canopy reported an adjusted EBITDA loss of C$57.7 million, worse than the C$23.7 million loss that was expected.

The results included the non-cash share-compensation expenses, fair value changes on financial assets and liabilities and other non-cash expenses which added C$115.7 million, or 52 cents a share, to the total loss. Revenue rose 33% to C$23.3 million, way below the FactSet consensus of three analysts of C$60.0 million and the Bloomberg consensus of C$59.1 million. The consensus consisted of three estimates, ranging from C$33.7 milion to C$83.6 million. Sales of oils constituted 34% of product revenue, compared to 18% a year ago. Kilograms of cannabis harvested surged by 265% to 15,127, while kilograms sold grew by 9% to 2,197 and the average selling price per gram skyrocketed by 24% to C$9.87. Post the legalisation of recreational cannabis, the company made only limited "test" shipments of C$700,000. Active registered patients increased by 34% to 84,400. 

The stock has gained 44% over the past three months, and 63% this year through Tuesday. 

The $4 billion investment made by beverage company “Constellation Brands” ( mother of Corona Beer and Svedka Vodka ) earlier this year, provided a lot of good fame and cushioning to the weed company.

During the press release chairman and co-CEO Bruce Linton said "With extensive investments over the past year, including most notably in the second quarter, in branding and retail development, our entrance into the retail cannabis market has been a success with our SKU assortment obtaining over 30% listings market share in multi-store physical retail store networks nationwide. With substantial product inventories on hand, new product formats coming to market as planned, a captive sales force driving increased demand through physical retail stores and increasing internal and channel efficiencies, we believe based on market conditions today that we will attain significant and sustainable market share of the Canadian recreational market.”

Reporting for EasyKobo on Wednessday , 14 November 2018 in Lagos, Nigeria

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