It appears that Canopy Growth Corp (TSX: WEED) (NYSE: CGC) has arrived to save the day yet again for the Canadian cannabis sector. The firm was the first major producer this week to post positive financial statements following disappointing results from both that of Aurora Cannabis (TSX: ACB) and The Supreme Cannabis Company (TSX: FIRE).
Canopy Growth posted net revenues of $123.8 million for the third quarter of 2020, a significant increase of 62% from that of the previous quarter. The increase was driven by positive quarter over quarter results in all segments, with recreational cannabis revenue growing 9% to $83.5 million, international medical sales growing 3% to $18.7 million, and other income growing 42% to $33.2 million. The firm recognized revenues of $135.6 million before excise taxes of $11.8 million.
Despite the positive increase in sales, Canopy Growth still has a long path to profitability. The firm posted gross margins of $41.8 million before fair value adjustments, while expenses came in at an astounding $231.7 million for the quarter. The largest expense was that of general and adminitration at $67.3 million, followed by sales and marketing at $62.1 million and share based compensation at $56.7 million.
Canopy’s cash position increased during the quarter, from $1.1 billion to that of $1.5 billion, which primarily appears to be the net effect of marketable securities decreasing from $1.6 billion to $0.7 billion. Accounts receivable stayed relatively flat, increasing to $108.8 million from $107.4 million. Inventory meanwhile increased significantly, from $461.7 million to $622.5 million. Current assets overall decreased from $3.5 billion to that of $3.1 billion.
Current liabilities however have stayed flat in comparison. Accounts payable decreased from $286.8 million, to that of $225.1 million. This gain was offset by other current liabilities which increased to $171.4 million from $124.8 million. Current liabilities overall decreased marginally from $425.8 million to $418.3 million.
Overall, Canopy Growth posted a net loss of $124.1 million for the quarter.
Canopy Growth last traded at $25.88 on the TSX.
Information for this briefing was found via Sedar and Canopy Growth Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.