Marijuana investors are looking forward to this moment for a long time, as large companies in the cannabis sector finally tell them how one of the most important events in the history of the start-up industry has affected their business. In particular, Canopy Growth (NYSE: CGC) attracted much attention through its loud steps to build capacity and a great partnership with giant beer and alcohol Constellation Brands .
In the financial report of the fourth quarter of fiscal fourth quarter, Canopy investors were optimistic about how the company will speak in Canada with the introduction of recreational cannabis. The Canopy numbers were impressive, but even more encouraging was the discussion of the leadership of the company's strategic intentions. Shareholders are delighted with news, and there is plenty of potential for future growth of Canopy.
Canopy Growth's third-quarter financial results gave investors much of what they were looking for. Income less excise taxes was $ 83 million ($ 62.5 million), which was 282% compared to the previous quarter and well above the $ 23.2 million. Net profit increased to 74.9 mln. US, which turned into profit per share in the amount of 0.22 dollars. USA, which was much higher than the consensus expectations of a loss of $ 0.17. US $ per share
Many major Canopy business numbers have shown a surprising increase. The company has grown four times sales volume for the quarter, selling more than 10.1 thousand kilograms of cannabis compared to only 2330 years ago. At the same time, Canopy was able to raise its price for several categories of sales, with the average sale price of medicines for marijuana in Canada increasing by 19% to $ 9.77. US dollars per gram. Such success took place on the international level; prices increased by 5% to $ 13.28. US dollars per gram. As expected, recreational pricing for cannabis was more competitive, with sales prices of $ 6.96. US dollars were lower than the corresponding products of medical marijuana. This led to a 1% downgrade to Canopy's total sales price of up to 12%, but considering the change in sales mixes to include recreational products, the company was not dissatisfied with this result.
. The company reported that 33% of the proceeds from the product came from lubricants, and its productive Softgel capsule appeared quite well.
Another thing that Canopy investors need to understand is that most of the company's performance has come from adjustments related to the change in the cost of outstanding financial obligations. In particular, since the fair value of the old convertible bills and other financial assets decreased during the last measurement period, Canopy reported more than $ 220 million. Without these adjustments, Canopy would see significant losses as costs for this period increased sharply. Total operating expenses increased almost four times over the previous year, as large increases in sales and marketing, research and development, and overhead costs hit the bottom line of Canopy. The cost of compensation in the stock market was also much higher.
The co-executive director of Bruce Lynton had a long way to go. "Our successful first full quarter of recreational sales in Canada," Linton said, "enhances our long-standing strategy of making significant investments early in order to secure market share." The CEO continued to point out that the company "catches the attention of consumers" with its first wave of products in Canada to satisfy recreational demand.
Canopy has far more ambitious plans for the future. The legalization of the hemp will play a key role, and Linton expects Canopy "to continue to expand by making strategic investments in production in regions with federally permissible paths for the market supply of hemp and hemp"
- New supply agreements with several companies for extraction of cannabis oil
- by adding a Tokyo Smoke retail channel to complement the existing Tweed brand
- completing the commissioning of key production facilities that are under construction
- exploring opportunities Intellectual Property Related to Innovative Growth Methods
The most important thing is that Canopy remains able to consider massive investment in its business in the near future. Due to the large investments made by Constellation Brands, Canopy has more than $ 4.1 billion. This puts the marijuana company in an excellent position to make choices about the investment opportunities available in the industry without fear of foreclosing them with less competitive competitors
. Early in the day after the announcement. With plenty of opportunities for prosperity, it's no surprise that shareholders are more than happy about the potential that Canopy Growth started in 2019.
Dan Caplinger has no position in any of the aforementioned shares. Motley Fool does not have any position in any of these stocks. Motley Fool has a policy of disclosure