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7 Things Investors are Paying Attention to From CannTrust's Q2'17 Earnings

August 28, 2017

(Image Credit - Nick Youngson)


Earlier today, CannTrust Holdings Inc. (CSE:TRST)(OTC:CNTTF)(FRA:C9S) announced the company's earnings for the three and six months ended June 30, 2017. Despite having been initially licensed on June 12, 2014, making them one of the older Canadian licensed producers, CannTrust just started trading on the Canadian Securities Exchange last week. Here are seven things that investors are paying attention to from the company's first earnings release as a publicly traded company...


Related: 10+ Things to Know About the CSE's Upcoming Cannabis Listing


  1. Revenues rose more than 469% from the comparable quarter of last year to $4,541,378 CAD. This increase in revenue was attributable to higher sales volumes primarily due to the growth in the company's patient base from 3,800 at June 30, 2016 to more than 20,000 as of June 30, 2017. In the three months ended June 30, 2017, CannTrust sold 227,800 grams of dried marijuana for $8.58 CAD in net revenue per gram. The company also sold 1,113,840 ml of cannabis oils in the three months ended June 30, 2017 for $2.05 CAD per gram in average net selling price. 

  2. The gross profit for the three months ended June 30, 2017 was $3,999,530, compared to $222,828 in the comparable period of 2016. This increase in gross profit can be attributed to increased revenues and a higher unrealized gain on changes in fair value of biological assets. 

  3. Expenses increased roughly 109% from $1,168,153 CAD in Q2'16, to $2,451,681 CAD in the second quarter of 2017. This increase in expenses can be attributed to increased general and administrative expenses, selling and shipping costs, professional fees and salaries and benefits as the company responded to increased demand by adding staff. 

  4. Net income in Q2'17 was $754,864 CAD, up from a loss of $1,565,661 CAD in the comparable period of last year. CannTrust generated $0.01 CAD in earnings per share for the quarter ended June 30, 2017. 

  5. The company has $14,902,482 CAD in cash as of June 30, 2017. 

  6. In the second quarter, the company began phase 1 development of their 430,000 square foot Niagara greenhouse that they plan on bringing online in the fall of 2017, assuming Health Canada approval. Including the second phase that they expect to complete in 2018, management estimates that this facility should provide the company with up to 40,000 additional kilograms of growing capacity annually. 

  7. CannTrust is also working on diversifying its business model by developing new and innovative cannabis products. In furtherance of this, the company has an exclusive joint venture with Apotex, a leading Canadian manufacturer of generics, to develop novel cannabinoid dosage formats and products. The company also founded Cannabis Coffee & Tea Pod Company with Club Coffee L.P. to launch a pod formulation for the administration of cannabis using single-serve brewing pods in Keurig and Nespresso like brewers. Cannabis Coffee & Tea Pod Company has been granted a U.S. patent for the pod formulation and unit dosing. Additionally, through the Cannabis Coffee & Tea Pod Company, CannTrust will receive royalty income from a licensing agreement currently covering six states: Washington, Oregon, California, Nevada, Arizona and Colorado.


Market Reaction


In late trading on the day of the release, shares of CannTrust are rising more than 5% on the CSE. The company's OTC Markets symbol is up more than 13% on higher than average volume. Including today's gains, shares of CannTrust are down roughly 2% from their opening price of $2.50 CAD on August 21st, the company's first day of trading.




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