We last reviewed CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) just a few days ago on June 23, 2017. We did so the day before some very impactful news about the Company was released. For the sake of keeping our subscribers well informed and up to date, we are doing a supplemental follow-up to our last review of the company.
First, a little background on the Company for those not familiar with it. Canopy Growth is a world-leading diversified cannabis company, offering distinct brands and curated cannabis varieties in dried, oil and capsule forms. Through its wholly‑owned subsidiaries, Canopy Growth operates numerous state-of-the-art production facilities with over half a million square feet of GMP-certified indoor and greenhouse production capacity, all to an unparalleled level of quality assurance procedures and testing. Canopy Growth has established partnerships with leading sector names in Canada and abroad, with interests and operations spanning four continents. The Company is proudly dedicated to educating healthcare practitioners, providing consistent access to high quality cannabis products, conducting robust clinical research, and furthering the public’s understanding of cannabis.
Our prior reviews of Canopy Growth include details of the expansion activities at the Yorkton, Saskatchewan-based Tweed Grasslands, the Campus in Smiths Falls, and the Mettrum Bowmanville, Ontario facility. On June 24, 2017, the day after out most recent review, Canopy Growth released the first in a series of capacity announcements and expansion plans. The announcement included an Agreement with Goldman Holdings, Ltd. pursuant to a previously announced Memorandum of Understanding (MOU), to begin the build-out and licensing process for a 160,000 square foot indoor facility in Edmonton, Alberta. The facility will be leased to Canopy Growth by Goldman Group with an option to purchase the facility at the end of each 5-year quarter of the 20-year lease. The transaction is expected to close August 1, 2017 with the existing tenants vacating October 1, 2017. The licensing is contingent upon Health Canada and municipal approvals.
Also included in the announcement was an agreement to acquire a 100,000 sq. ft. facility in Fredericton, New Brunswick with the intention of launching a Tweed facility for indoor production in New Brunswick.
On June 27, 2017, Canopy Growth released its financial results for the fourth quarter and fiscal year 2017, the period ended March 31, 2017. Some of the fourth quarter fiscal 2017 highlights include:
- Revenue of $14.7 million; a 50% increase over third quarter fiscal year 2017 and a 191% increase over the prior year’s quarter
- Average sales price per gram was $8.03 as compared to $7.36 in the third quarter of fiscal year 2017 and $7.16 in the prior year’s quarter
- Sold 1,740 kilograms and kilogram equivalents; a 40% and 149% increase over the third quarter fiscal year 2017 and prior year’s quarter, respectively
- Adjusted Product Contribution was $9.6 million or 66% of revenue as compared to an adjusted Product Contribution of $3.2 million and 63% of revenue in the same quarter of last year, and 68% for the third quarter of fiscal 2017
- Sales and Marketing and G&A expenses continued the trend of decreasing as a percentage of sales
- Adjusted EBITDA amounted to a loss of $5.3 million compared to an Adjusted EBITDA loss of $4.4 million in the prior year’s quarter
For fiscal year 2017, revenue of $39.9 million was reported; an increase of 214% over fiscal year 2016 revenues of $12.7 million. The Company ended the year with $101.8 million in total cash and cash equivalents. Bruce Linton, Chairman & CEO stated:
“We will continue to invest in our business, to bring more capacity and more permitted products to more customers in more markets, all with a view to increasing market share and maximizing shareholder return in the long term. We strongly believe that continuing to invest in our industry leadership position, strategically trading off short-term profitability for long term value, is the right decision for shareholders, patients and our communities.”
We reiterate our position on Canopy Growth Corp. The Company’s financials include all indicators of growth: steady revenues, positive cash flow, and a strong sheet. More importantly, the company continues to aggressively expand and capture more market share in a rapidly growing industry. TWMJF definitely stays in the “Buy” column. Be sure to check out our complete coverage on TWMJF. We will be updating our subscribers as soon as we know more. For the latest updates on TWMJF, sign up below!
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Disclosure: We have no position in TWMJF and have not been compensated for this article.