Earlier this morning, Canopy Growth Corp. (TSX:WEED)(OTC:TWMJF)(FRA:11L1)released and filed their first quarter financial results. It was a busy quarter at Canopy given the launch of their Tweed Main Street online store and craft grow program, continued efforts to integrate the Mettrum acquisition and more. Here are seven highlights from the quarter that current and potential investors should pay attention to:
Revenue for the first quarter was $15.9 million CAD, up 172% versus the comparable quarter of last year. Revenues increased 8% versus the fourth quarter of 2017. Although up compared to both the previous quarter and the first quarter of last year, revenues were negatively impacted by the migration to the Tweed Main Street online store (that resulted in a temporary shutdown for the previous online stores). Additionally, less Mettrum branded products were available for sale in Q1'18, due to the continued integration of the acquisition. This added more downward pressure to revenues.
Canopy sold 1,830 kilograms and kilogram equivalents in Q1'18, an 86% increase over Q1'17. The company harvested 5,575 kg (mostly attributed to the Tweed Farms greenhouse harvest) in Q1'18, up 196% over the first quarter of 2017.
Weighted average cost per gram of cultivation to harvest and post-harvest costs before shipping and fulfilment decreased approximately 22% from the first quarter of last year to $1.28 CAD per gram in Q1'18.
Gross margin before non-cash gains or losses in the first quarter of 2018 was $9.0 million CAD or 57% of revenue. In the first quarter of 2017, Gross margin before non-cash gains or losses was $4,205 CAD or 60% of revenue. Gross margins in Q1'18 were impacted by 'one time' costs associated with resetting the Mettrum grow operations and centralizing all shipping and fulfilment activities in Smiths Falls as part of the "one store" implementation.
Net losses in Q1'18 were $4.4 million CAD, or $0.03 per basic and diluted share, compared to a net loss of $3.9 million, or $0.04 per basic and diluted share in the first quarter of last year.
As of the quarter end (June 30, 2017), the company had $115.5 million in cash and equivalents. The $13.6 million CAD increase in cash from the end of fiscal 2017 is primarily attributed to cash held by a controlled subsidiary, Canopy Rivers.
Along with the launch of Tweed Main Street, Canopy Growth Corp. launched their CraftGrow program allowing 'boutique' LPs to sell product through Canopy's new online store. The company partnered with Invictus MD's AB Laboratories, Canada's Island Garden, JWC Ltd, and PUF Ventures for the CraftGrow program in the quarter. Additionally, Canada's Island Garden products were released for sale on June 24, 2017.
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