Shares of Canadian marijuana producer Canopy Growth Corp. saw its shares fall last Thursday over 2% after the company released a wider than expected loss in the second quarter. Revenue also was short of expectations.
The Canadian-based company that is U.S. listed, reported a net loss that ballooned to C$374.6 million ($282.4 million), or C$1.08 a share, from C$330.6 million, or C$1.52 a share, in the year-ago period. According to the FactSet consensus, the expectation for net losses per share was C41 cents.
While net revenue more than tripled to C$76.6 million ($57.7 million) from C$23.3 million in the year ago period, it was under the FactSet consensus of C$90.6 million.
Kilograms harvested of 40,570 was up from 15,217 a year ago but were also down from 40,960 in the sequential first quarter. The company’s recreational business-to-business dry cannabis sales was 7,497 kilograms and recreational business-to-consumer dry cannabis sales were 1,064 kilograms. It should be noted that there were no recreational sales a year ago. Medical dry cannabis sales fell to 998 kilograms from 1,698 kilograms.
“The last two quarters have been challenging for the Canadian cannabis sector as provinces have reduced purchases to lower inventory levels, retail store openings have fallen short of expectations, and Cannabis 2.0 products are yet to come to market,” said Chief Executive Mark Zekulin.
According to Zekulin, the challenges are “a short-term headwind in what is a brand new industry.”
Shares of Canopy Growth have fallen over 30% YTD.
Disclaimer: We have no position in Canopy Growth Corp. (NYSE: CGC) and have not been compensated for this article.