Canopy Growth posts C$670m annual net loss, from C$226.3m in net revenues

Canopy Growth Corporation saw annual net revenue grow 191% to C$226.3m in the 12 months to end of March – but the company suffered from a severe net loss of C$670m.

The results, revealed as part of Canopy’s fiscal Q4 earnings, show that the company’s operating losses reached C$577m in the year, widening significantly on the C$82.3m op loss posted in the prior 12 months.

In terms of fiscal Q4 (calendar Q1 2019), Canopy posted C$94.1m in net revenues, with an operating loss of C$174.5m – more than three times the op loss seen in the previous year.

Net loss in the three months to end of March was C$323.3m.

“The fourth quarter wraps up a historic year with major steps taken in Canada to build-out our national platform while scaling all of our processes to bring cannabis to market.”

Bruce Linton, Canopy Growth

Canopy says that it shipped 24,300 kilograms and kilogram equivalents during the fiscal year, including 16,300 kilograms of dry flower and 8,000 kilogram equivalents of oil and softgels.

The biggest news in its fiscal year was the C$5 billion investment secured from Constellation Brands which was partly deployed in the acquisition of medical cannabis device manufacturer, Storz & Bickel.

Subsequent to year end, Canopy also acquired Germany-based C³ Cannabinoid Compound Company, Europe’s largest cannabinoid-based pharmaceutical company and UK-based beauty and wellness brand, This Works Products Limited.

At March 31, 2019, the company’s cash, cash equivalents available, and marketable securities totaled C$4.5 billion.

“The fourth quarter wraps up a historic year with major steps taken in Canada to build-out our national platform while scaling all of our processes to bring cannabis to market. The third quarter of the year benefitted from months of advanced production while the fourth quarter relied more on efficient throughput and a more automated platform,” said Bruce Linton, Chairman and Co-CEO of Canopy Growth.

“With more product formats coming to the Canadian market later in the year, we are working hard to ensure that we are ready to hit the ground running with products, formats and brands that Canadians trust.”

Canopy’s general and administrative expenses in fiscal 2019 were C$168.5 million, reflecting investments in building commercial capacity, governance and public company compliance costs associated with TSX and NYSE listings, legal and professional services in expanding operations, enhancing information technology capabilities, scaling efforts ahead of market expansion, compliance costs associated with meeting Health Canada regulatory requirements, and employee compensation costs associated with the above.

Research and development expenses incurred in fiscal 2019 were C$15.2 million. This was primarily attributable to Canopy’s R&D team conducting research into a variety of innovation and intellectual property opportunities.

Acquisition-related expenses were C$23.4 million in fiscal 2019, with Canopy Growth closing on several transactions in the year including the acquisition of HIKU Brands Company Ltd., ebbu, Inc., Storz & Bickel GmbH & Co. KG, and Canopy Health Innovations Inc. Acquisitions announced subsequent to fiscal 2019 – including This Works Products Limited, Canamo y Fibras Naturales, S.L. (“Cafina”), and the future acquisition of Acreage – incurred related expenses throughout fiscal 2019 as well.

Share-based compensation, a non-cash expense, was C$182.8 million in fiscal 2019, up from C$29.6 million in fiscal 2018 with C$74.7 million accounted for in Q4, representing an increase from C$11.9 million in Q4 fiscal 2018. The increase was primarily due to increased number of employees granted stock options as headcount increased to 3,200 employees from 1,000 year-over-year and accounting for the increase in fair value of stock options granted considering the 80% increase in the company’s share price that occurred over fiscal 2019.Cannabis Business Worldwide

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