Canopy Growth Corporation’s (CGC, WEED) stock fell over 8.8% in premarket hours on Wednesday after the company reported a wider loss and missed estimates on revenue for the second quarter of 2019.
Total revenues were CAD23.3 million, up 33% versus the prior-year period and in line with management’s expectations leading into the opening of the recreational cannabis market. The consensus estimate was for revenue of CAD60 million.
The company reported a net loss of CAD330.6 million or CAD1.52 per share compared to a loss of CAD1.6 million or CAD0.01 per share last year. The 2019 results included expenses of CAD115.7 million or CAD0.52 per share.
During the quarter, Canopy sold 2,197 kilograms and kilogram equivalents at an average sale price of CAD9.87, up from 2,020 kilograms and kilogram equivalents at an average price of CAD7.99 in the prior-year period, representing increases of 9% and 24% respectively. The average price increase was driven by changes in the mix of product sold, mainly a higher percentage of Softgel sales and sales to Germany.
Oils, including Softgel capsules, accounted for 34% of the product revenue during the quarter, reflecting an increased demand for value-added products that require lower active ingredient inputs and provide higher margins. The company saw an increase of 34% year-over-year in active registered patients to 84,400.
During the quarter, Canopy secured a CAD5 billion investment from Constellation Brands (STZ), which the company plans to use in achieving its core strategic objectives.
Canopy completed the acquisition of HIKU during the quarter, adding the Tokyo Smoke retail network to its Tweed stores. Tokyo Smoke currently has three retail cannabis stores in Winnipeg and plans to add 12 additional stores in provinces that support private retail by September 2019. Tweed also plans to add 20 brick and mortar shops in provinces with private retail models by September 2019.
Inventory at September 30, 2018 amounted to CAD150.4 million and biological assets amounted to CAD20.7 million, together totaling CAD171.1 million.