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Friday, February 14, 2020

-=Canopy Growth (CGC) reported earnings on Fri 14 Feb 20 (b/o)

  • Feb. 11: #5; vol. 8.8M;  +15%
  • Last summer, Canopy's board, which is controlled by Constellation, ousted then co-CEO Bruce Linton. David Klein, Constellation's former CFO, became Canopy's CEO last month.
  • Constellation initially invested in Canopy in 2017 with the hopes of developing cannabis-infused drinks to offset a plateau in booze sales. But analysts say cannabis beverages are likely to remain a small part of the overall cannabis market.

Canopy Growth beats by $0.13, beats on revs

  • Reports Q3 (Dec) loss of CC$0.35 per share, CC$0.13 better than the S&P Capital IQ Consensus of (CC$0.48); revenues rose 49.0% year/year to CC$123.7 mln vs the CC$104.85 mln S&P Capital IQ Consensus.

  • Canadian marijuana giant Canopy Growth's (CGC) fiscal third-quarter results beat forecasts on Friday, helped by a bigger store count and a more aggressive cost-cutting drive. Canopy Growth stock soared, leading a rally in marijuana stocks.

    During the company's conference call, Canopy's new CEO, David Klein, also said Canopy would take further steps to "rightsize" business over the next 90 days. He said the company would pull back on mergers and acquisitions, do more to balance its weed supplies with demand, and put more thought into "where we won't play as well as where we will."

    Even as financing dries up for the industry, Klein said the company's $2.3 billion in cash — thanks to a big investment from his former employer, beer-and-wine distributor Constellation Brands (STZ) — "cannot be understated."

    But delays in beverages and some vaping products, Canopy said, would have a "modest" impact on growth. Growth in the next quarter, it said, will also likely be modest, after a strong December and demand for its Storz & Bickel vaporizers.

    Klein also said Canopy needed to get better at putting out products customers wanted, and bring more discipline to the company. Rivals, meanwhile, are pushing cheap weed in an effort to draw customers from the illicit market.

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