The Smiths Falls, Ont.-based company said the wider-than-expected loss is mainly due to a one-time, non-cash loss on the extinguishment of warrants held by alcohol giant Constellation Brands Inc. (STZ)
The Corona-beer maker has a 38 per cent stake in Canopy Growth, with the option of acquiring a majority in the future.
New York-listed shares fell more than 10 per cent in aftermarket trading following the release of the quarterly results.
Canopy Growth reported $90.5 million in revenue net of excise taxes for the period ended June 30, 2019. Adjusted EBITDA was negative $92 million due to losses in Canadian and European operations, the company said.
Analysts expected Canopy Growth to book a net income loss of $166.4 million, $111.2 million in revenue, and an EBITDA loss of $106.3 million.
Canopy Growth said total kilograms and kilogram equivalents of cannabis sold rose to 10,549, an increase of 13 per cent from the fourth quarter. The company said dried cannabis sales in the Canadian recreational market by climbed 94 per cent over Q4. Revenue from international medical cannabis sales climbed 209 per cent year-over-year.
CEO Mark Zekulin did not directly address the wider-than-expected loss related to Constellation Brands in a news release on Wednesday night.
“The company remains focused on laying the foundation for dominance in an emerging global opportunity. This means investments in developing intellectual property, building brands, building international reach, and ensuring scaled production capability for current and future products,” he wrote.
“We are fixated on the process of evolving from builders to operators over the remainder of this fiscal year, meaning that as our expansion program comes to a close in Canada, and as new value-add products come to market in Canada, we demonstrate a sustainable, high margin, profitable Canadian business.”
Canopy Growth has remained active on the M&A front, closing its acquisition of U.S. multi-state operator Acreage Holdings Inc. (ACRG-U.CN)(ACRGF) in June. The company closed three additional European acquisitions, C3 in Germany, Cafina in Spain, and U.K.-based beauty and sleep solutions company This Works.
The quarter marks Canopy Growth’s final fiscal period under co-chief executive Bruce Linton, who was ousted from his role in early July. Linton’s abrupt departure came on the heels of vocal displeasure from major shareholder Constellation Brands over the cannabis producer’s lacklustre financial performance. Zekulin stepped in as sole CEO, beginning a search for new leadership.
Toronto-listed Canopy Growth shares ended Wednesday’s session down 5.76 per cent to $42.57. In New York, shares declined 6.64 per cent to $31.93.
Canopy Growth will host a conference call with analysts to discuss its latest quarter at 8:30 a.m. ET on Thursday.