CalyxCrusher
Well-Known Member
LOL I highlighted my favorite parts in bold text.
www.thechronicleherald.ca
Canopy Growth Corp said on Thursday it may miss targets for fourth quarter revenue as regulation slows store openings, adding to signs of weakness in the legal cannabis market and hammering shares across the sector.
The quarterly report by the largest of Canada's new brand of pot producers included details of large unsold surpluses of marijuana and followed signals from two rivals this week that average selling prices had sunk.
Chief Financial Officer Mike Lee in a post earnings call with analysts said the Canadian market was 6 to 12 months behind where the company had expected it to be, following legalization of recreational weed a year ago.
A slow roll out of retail stores, the prevalence of illicit markets and burgeoning supply from producers racing to assert dominance have led to steep price falls and unsold pot stacking up.
"We do not believe at this time that there will be sufficient points of retail sales in the near-term to unlock the necessary Q4 demand," Chief Executive Officer Mark Zekulin said.
The company gave no new forecast for revenue in the fourth quarter ending next March, but had previously predicted it would reach C$250 million, compared with analysts' expectation of C$183.94 million, according to Refinitiv IBES data.
Inventory buildup resulted in a C$15.9 million charge in the second quarter for Canopy, which harvested 40,570 kilograms of weed, but sold only 10,913 kilograms and kilogram equivalents of cannabis products.
The company also took a charge of C$32.7 million ($24.71 million) as it restructured its portfolio to account for returns, return provisions and price cuts for its softgel and oil products.
Shares of Canopy, which posted a wider-than-expected quarterly loss, fell as much as 17%, while its U.S.-listed shares touched a record low of $15.19. Peers Aphria , Cronos and Tilray fell between 4% and 9%.
A huge hit with investors last year, shares in the sector are down about 25% in 2019, according to the alternative harvest ETF , which tracks cannabis-related stocks.
The near-term outlook was also weakened this week by reports from Tilray and Cronos which showed selling prices had nearly halved in the September quarter.
Canopy said it would stop making any significant expansion investment in Canada, having spent heavily to build its portfolio of edible, vapes and other derivative products that were legalized in the country in October.
Capital spending would be "muted" in the next 12 to 18 months, company officials said.
The firm's adjusted core loss of C$155.75 million came above expectations of C$92.9 million of loss, with a 48% rise in costs outweighing a three-fold rise in net revenue to C$76.6 million.
Pot producer Canopy Growth reels under slow retail store openings | The Chronicle Herald
By Shanti S Nair (Reuters) - Canopy Growth Corp said on Thursday it may miss targets for fourth quarter revenue as regulation slows store openings, adding to signs of weakness in the legal cannabis market and hammering shares across the sector. The
www.thechronicleherald.ca
Canopy Growth Corp said on Thursday it may miss targets for fourth quarter revenue as regulation slows store openings, adding to signs of weakness in the legal cannabis market and hammering shares across the sector.
The quarterly report by the largest of Canada's new brand of pot producers included details of large unsold surpluses of marijuana and followed signals from two rivals this week that average selling prices had sunk.
Chief Financial Officer Mike Lee in a post earnings call with analysts said the Canadian market was 6 to 12 months behind where the company had expected it to be, following legalization of recreational weed a year ago.
A slow roll out of retail stores, the prevalence of illicit markets and burgeoning supply from producers racing to assert dominance have led to steep price falls and unsold pot stacking up.
"We do not believe at this time that there will be sufficient points of retail sales in the near-term to unlock the necessary Q4 demand," Chief Executive Officer Mark Zekulin said.
The company gave no new forecast for revenue in the fourth quarter ending next March, but had previously predicted it would reach C$250 million, compared with analysts' expectation of C$183.94 million, according to Refinitiv IBES data.
Inventory buildup resulted in a C$15.9 million charge in the second quarter for Canopy, which harvested 40,570 kilograms of weed, but sold only 10,913 kilograms and kilogram equivalents of cannabis products.
The company also took a charge of C$32.7 million ($24.71 million) as it restructured its portfolio to account for returns, return provisions and price cuts for its softgel and oil products.
Shares of Canopy, which posted a wider-than-expected quarterly loss, fell as much as 17%, while its U.S.-listed shares touched a record low of $15.19. Peers Aphria , Cronos and Tilray fell between 4% and 9%.
A huge hit with investors last year, shares in the sector are down about 25% in 2019, according to the alternative harvest ETF , which tracks cannabis-related stocks.
The near-term outlook was also weakened this week by reports from Tilray and Cronos which showed selling prices had nearly halved in the September quarter.
Canopy said it would stop making any significant expansion investment in Canada, having spent heavily to build its portfolio of edible, vapes and other derivative products that were legalized in the country in October.
Capital spending would be "muted" in the next 12 to 18 months, company officials said.
The firm's adjusted core loss of C$155.75 million came above expectations of C$92.9 million of loss, with a 48% rise in costs outweighing a three-fold rise in net revenue to C$76.6 million.
