Cannabis producer Canopy Growth (TSX:WEED) reported its third-quarter revenue rose 23% to $152.5 million, beating analyst expectations, but warned that it is still a year away from becoming profitable.
Canopy Growth said it lost $829.3 million in the three months ending December 31, roughly half of which was due to impairment charges related to the closure of several production facilities in 2020. A year earlier, Canopy posted a net loss of $109 million.
Canopy's quarterly results come after a period when the company dramatically scaled back its Canadian operations in a move that resulted in the departure of 220 workers but allowed for $200 million in annual cost savings.
That retrenchment happened amid an industry-wide glut of cannabis that prompted countless Canadian pot producers to report steep losses as they restructured operations to find a path to profitability.
Smiths Falls, Ontario-based Canopy Growth said an increase in Canadian recreational and international medical cannabis sales, as well as an improvement in its U.S. CBD business, helped to boost its revenue in the quarter. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss came to $68 million in the quarter, compared to a $97-million loss a year earlier.
Analysts expected Canopy Growth to report fiscal 2021 third-quarter revenue of $147.6 million and a $71.1-million adjusted EBITDA loss. Canopy said it now expects to report positive adjusted EBITDA during the second half of the 2022 fiscal year and positive operating cash flow a full year later.
Those forecasts assume that its share of the Canadian recreational and medical cannabis market will continue to grow while keeping capital expenditures below $200 million for the next two years. The company said that its share of the Canadian market rose sequentially in its third-quarter from the prior three-month period to 15.7%.
In reporting its earnings, Canopy Growth said it expects to enter the U.S. THC cannabis market by the end of 2021 amid hopes of new federal legislation or reform packages.
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