Canadian marijuana producer Canopy Growth Corp. reported a net loss of 617 million Canadian dollars ($513 million) for its fourth quarter, alongside an annual net loss of nearly CA$1.7 billion for its 2021 fiscal year, despite growing revenue.
Canopy’s annual net loss exceeded its fiscal 2020 net loss by CA$283 million.
Adjusted earnings before interest, taxes, depreciation and amortization – a nonstandard measure of profitability – was negative CA$94 million for the quarter and negative CA$340.3 million for the year.
The Smiths Falls, Ontario-based company said it was on track for positive adjusted EBITDA during the second half of its current fiscal year, which ends March 31, 2022.
On a Tuesday conference call with analysts, Canopy CEO David Klein said that in light of significant recent acquisitions by Canadian competitors, the company was “very happy with our portfolio in Canada and with the ability of that portfolio to travel to the U.S.”
One of those M&A deals is Hexo’s planned CA$925 million acquisition of Redecan, one of the leading adult-use producers in the country by market share.
“If you look at where we would focus next, with our balance sheet and with an eye toward (mergers and acquisitions), it’s going to be the U.S.,” Klein added.
Canopy reported cash and short-term investments worth CA$2.3 billion as of March 31.
Klein said he was “really bullish” regarding the potential speed of federal legalization efforts in the United States.
“I believe we’re in a position now where you have Republicans and Democrats who are each trying to craft their own (marijuana legalization) bills – what they’re not questioning is, ‘Should cannabis be legalized.’ They’re simply questioning the ‘how,'” he said.
“I personally believe it will move faster than maybe a lot of people think, because when you get that many people aligned on the ‘what,’ sometimes the ‘how’ gets negotiated.”
Annual net revenue was CA$546.6 million, a 37% increase over Canopy’s 2020 net revenue.
Canopy said it captured 19% of the “total flower” category in Canada’s recreational marijuana market during the fourth quarter, based on internal metrics, along with 10.9% of the coveted premium cannabis flower market.
Although Canopy’s Canadian adult-use cannabis revenue declined slightly on a quarter-over-quarter basis to CA$61.1 million, Canaccord Genuity analyst Matt Bottomley wrote in a Tuesday note to clients “that most of Canopy’s peers have seen similar or worse sequential revenue declines to start 2021.”
Canadian recreational cannabis revenue in the quarter ended March 31 was:
- Dry bud: CA$67.9 million.
- Oils and softgels: CA$6.7 million.
- Beverages, edibles, topicals and vapes CA$7.1 million.
Medical revenue by category in the same three months were:
- Dry bud: CA$9.7 million.
- Oils and softgels: CA$25.5 million.
- Beverages, edibles, topicals and vapes: CA$6.4 million.